Niskayuna engineer sentenced to two years in federal prison

PHOTOGRAPHER: Ted Remsnyder

Xiaoqing Zheng leaves the federal courthouse in Albany following his sentencing on Tuesday.

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ALBANY — The Niskayuna engineer convicted of conspiracy to commit industrial espionage was sentenced to two years in federal prison in U.S. District Court on Tuesday.

Xiaoqing Zheng was arrested in August 2018 and accused of stealing intellectual property and providing it to China while on the job as a turbine engineer at General Electric in Schenectady.

He was tried on 12 charges in March and convicted of one count of conspiracy, which held a maximum sentence of up to 15 years in prison.

While Assistant U.S. Attorney Richard Belliss requested during the sentencing hearing that Zheng receive an eight-year prison term and a $500,000 fine, U.S. District Judge Mae D’Agostino handed Zheng a 24-month federal prison sentence and one year of supervised release with a $7,500 fine.

“We were hoping for a sentence as low as possible and that was as low as possible,” defense attorney Kevin Luibrand said following the hearing. “The judge varied and I think she saw the total circumstances. There are still some very significant appeal issues so we’ll be pursuing the appeal as well.”

Zheng, 59, was accused of stealing GE’s proprietary technology while attempting to use the information to establish a pair of Chinese turbine manufacturing facilities.

“The court believes the crime committed by Dr. Zheng is extremely serious,” Judge D’Agostino said during sentencing. “American companies have a right to rely on their research and development and rely on everything that goes into this complex technology and not have it stolen to benefit an economic competitor.”

D’Agostino determined that Zheng’s actions had cost GE $1,058,800 in estimated losses based on business plans prepared by Zheng for his Chinese companies.

“This is a case of textbook economic espionage,” Assistant Attorney General Matthew Olsen declared following the sentencing. “Zheng exploited his position of trust, betrayed his employer, and conspired with the government of China to steal innovative American technology. The Justice Department will hold accountable those who threaten our national security by conniving to steal valuable trade secrets on behalf of a foreign power.”

Zheng expressed contrition during the sentencing, saying he has taken satisfaction from his current life as a handyman while under supervised release since 2018.

“I have more gratitude than any negative feelings,” Zheng said during the hearing. “I feel so thankful to so many people, especially my family.”

Zheng remained stoic while the judge read his sentence as his family watched from the courtroom gallery.

Luibrand argued during the sentencing hearing that Zheng should not be sent to prison.

“According to the judge’s calculation, it could have been substantially higher,” Luibrand said of the sentence. “I think she saw the total picture of Dr. Zheng and the circumstances. That’s how she made the decision.”

Prior to sentencing, prosecutor Belliss argued that Zheng had cost GE an estimated $1.5 million to $3.5 million in losses with the potential of tens of millions more if his conspiracy had succeeded. Luibrand countered that the government had failed to establish actual losses GE had suffered.

During the sentencing, D’Agostino said that it proved difficult to determine with precision the losses that GE had suffered, noting that $1 million was a reasonable estimate.

During the March trial in federal court, a jury found Zheng not guilty on four counts and D’Agostino declared a mistrial on seven additional charges on which the jury was unable to reach unanimous verdicts.

“Zheng sought to enrich himself, and benefit the People’s Republic of China, by stealing trade secrets developed and owned by his longtime employer, General Electric,” U.S. Attorney Carla Freedman stated after the sentencing.

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