Niskayuna man convicted of one of 12 counts in GE espionage case

Xiaoqing Zheng after his initial arraignment in 2018
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Xiaoqing Zheng after his initial arraignment in 2018

ALBANY — After a four-week trial, a Niskayuna engineer was convicted Thursday of just one of the 12 espionage-related counts he faced in a case involving proprietary General Electric technology.

A federal jury found Ziaoqing Zheng, 59, not guilty on four counts and was unable to reach unanimous verdicts on the other seven counts. 

Judge Mae D’Agostino declared a mistrial on those seven charges and set an Aug. 2 sentencing for the single count on which Zheng was convicted: conspiracy to commit industrial espionage.

The U.S. Attorney’s Office said he faces up to 15 years in prison, a fine of up to $5 million and up to three years’ supervised release.

Zheng has been free on bail since his 2018 arrest. D’Agostino allowed him to remain free until sentencing but ordered him to submit to electronic monitoring and to obey a curfew.

Defense attorney Kevin Luibrand later Thursday said Zheng’s primary emotion was relief: Had he been convicted of more counts, he might have been placed in custody to await sentencing. Instead, he got to go home.

Luibrand said the conviction on the single charge will be appealed. 

“We still have some battles ahead,” he said.

Prosecutors, meanwhile, could seek to retry Zheng on the seven counts.

The jury had the case for all or part of eight days. It was, Luibrand said, the longest deliberation ever for a trial in the  Northern District of New York.

“For the past three and a half years Dr. Zheng has been fighting for his freedom from these allegations,” Luibrand said. “The government threw absolutely everything in its pipeline against him.”

This included the work of 20 FBI agents and five prosecutors and entailed possibly $2 million in costs to taxpayers, he estimated.

And ultimately, he said, Zheng was convicted only of conspiracy, not of actually stealing anything. 

Luibrand’s analysis is that the jury saw an “unsettling relationship between General Electric and the federal government on this prosecution.”

Zheng’s supervisors and co-workers abandoned him without adequate investigation, Luibrand said, and then “GE delivered a defective, weak set of facts to the federal government to prosecute.”

After Zheng’s arrest in August 2018, General Electric said: “We have been in close cooperation with the FBI for some time on this matter.”

On Thursday, it said: “At GE, we aggressively protect and defend our intellectual property. The defendant stole our IP, and we are gratified the jury has convicted the defendant of a criminal felony under U.S. federal law.”

The jury acquitted Zheng on two counts each of economic espionage and theft of trade secrets. Jurors were hung on one count each of false statements or entries and conspiracy to commit theft of trade secrets; two counts of economic espionage; and three counts of theft of trade secrets.

The allegations involved theft of more than 19,000 files containing General Electric technology related to the design and manufacture of gas and steam turbines. 

Zheng was alleged to have worked with a relative by marriage in China to accomplish the thefts. The two men own companies in China that have similar names, the same logo and function as separate divisions of an organization that seeks to develop and manufacture parts for turbines, the indictment stated.

Prosecutors alleged at the time that the effort was part of a strategy by the Chinese government to displace U.S. companies in the world marketplace.

Luibrand said then that the case had nothing to do with the Chinese government and was not espionage. Zheng, he said, had renounced his Chinese citizenship to become a naturalized U.S. citizen.

Later Thursday, federal officials repeated the central theme of their case, saying in a prepared statement:

“The trial evidence demonstrated that Zheng and others in China conspired to steal GE’s trade secrets surrounding GE’s steam and gas turbine technologies, knowing or intending to benefit the People’s Republic of China and one or more foreign instrumentalities, including China-based companies that research, develop, and manufacture parts for turbines.”

United States Attorney Carla B. Freedman said: “Today’s verdict holds Xiaoqing Zheng accountable for betraying his employer and trying to help China cheat in the global marketplace. With our law enforcement partners, we will continue to investigate and prosecute individuals who connive to steal trade secrets and valuable technology from the innovative companies doing cutting-edge work in our district.”

FBI Special Agent in Charge Janeen DiGuiseppi said: “Dr. Zheng used his status as a trusted engineer with GE to conspire to commit economic espionage on behalf of the People’s Republic of China. This conviction should send a strong message that the FBI will continue to vigorously investigate economic espionage cases and pursue prosecution in partnership with the United States Attorney’s Office to ensure the protection of American technology and American jobs.”

 

Categories: Business, News, Schenectady, Your Niskayuna

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