Man sentenced to 24 months in prison for allegedly stealing and sending Tesla trade secrets
Klaus Pflugbeil has been sentenced to 24 months in prison for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company. The company in question, which is a U.S.-based manufacturer of battery-powered electric vehicles and battery energy systems, is identified only as Victim Company-1 in a recent press release from the U.S. Department of Justice (DOJ), but several news outlets, including Reuters and The New York Times, have identified the company as Tesla.
Klaus, who lives in Ningbo, China, co-owns a China-based business with Yilong Shao, Klaus’s co-defendant who is currently at large. The business specializes in manufacturing batteries, including those used in electric vehicles. Allegedly, the two took trade secrets from Victim Company-1, which they used to build the business and marketed as a replacement for Victim Company-1’s products.
According to the DOJ, Klaus and Yilong both worked for a Canada-based manufacturing company that specialized in automated, precision dispensing pumps and battery assembly. In 2019, the Canadian company was acquired by Victim Company-1, which also gained its proprietary technology on continuous motion battery assembly. Yilong ended up working for Victim Company-1, and both defendants ultimately decided to steal Victim Company-1’s trade secrets for their own business activities. Klaus and Yilong’s business produced the same precision dispensing pumps and battery assembly lines that the Canadian manufacturer developed. The DOJ views this theft as a potential national security risk since the battery assembly technology in question gives Chinese automakers the ability to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology.
What people are saying
In a recent quote, Assistant Attorney General for National Security Matthew G. Olsen said, “In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications. The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”
U.S. Attorney Breon Peace for the Eastern District of New York added, “The defendant built a business in China to sell sensitive technology that belongs to a U.S. company. His actions were bold — he even advertised that he was selling the victim’s products — because he thought, incorrectly, that he was outside the reach of U.S. prosecutors. Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”
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