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GE engineer, a Niskayuna resident, indicted on economic espionage, other counts

GE engineer, a Niskayuna resident, indicted on economic espionage, other counts

GE engineer, a Niskayuna resident, indicted on economic espionage, other counts
Xiaoqing Zheng Is led from court in August
Photographer: Peter R. Barber/Gazette Photographer

ALBANY -- A General Electric engineer arrested in August on federal trade secret theft charges has been indicted on economic espionage and other counts.

Ziaoqing Zheng, 56, of Niskayuna, was indicted along with a Chinese business associate, accused of conspiring to steal General Electric turbine technology trade secrets, federal prosecutors said.

They are accused of doing so knowing that those secrets would be used to benefit China, prosecutors said.

In all, Zheng faces 14 counts, including economic espionage, theft of trade secrets and conspiracy to commit both.

He is accused of working with a Chinese businessman, a relative by marriage, Zhaoxi Zheng, 47, of China. Zhaoxi Zheng was indicted along with Ziaoqing Zheng. Zhaoxi Zheng, however, has not been arrested.

Ziaoqing Zheng was arrested Aug. 1 at his 8 Cephalonia Drive home in Niskayuna on Aug. 1, accused of using "an elaborate and sophisticated means to remove electronic files" involving GE Power & Water turbine technology trade secrets.

Zheng used a system called steganography to hide the data inside an innocuous looking digital picture and get it out of GE and home, the government says. He admitted the acts to investigators after the raid and said he used the picture method to take materials belonging to GE on five to 10 prior occasions, authorities said.

Zheng emailed and transferred many of the stolen files to his business partner and co-defendant, authorities said. Zheng and his co-defendant used the information to advance their own interests in two Chinese companies, prosecutors said.

The men, through their companies, received financial and other support from the Chinese government and coordinated with government officials there on research agreements with Chinese state-owned institutions, prosecutors said.

"The indictment alleges a textbook example of the Chinese government’s strategy to rob American companies of their intellectual property and to replicate their products in Chinese factories, enabling Chinese companies to replace the American company first in the Chinese market and later worldwide,” Assistant Attorney General for National Security John C. Demers said in a news release. “We will not stand idly by while the world’s second-largest economy engages in state-sponsored theft.”

Zheng was arraigned and released with conditions pending trial.

His defense attorney, Kevin Luibrand, has argued the case has nothing to do with the Chinese government and is not espionage. 

The overall investigation into Zheng relates to suspected thefts dating to 2014 and Zheng's unlawful use of GE's secrets, including his "ownership interest in companies that may compete with GE and Zheng's contacts in China," a previously filed federal affidavit states.

In 2014, Zheng allegedly downloaded more than 19,000 files from the General Electric computer network onto a personal thumb drive.

He faces up to 15 years in prison on the economic espionage counts and up to 10 years on the theft of trade secrets counts.

Zheng is now among three individuals with ties to General Electric locally charged in trade secret thefts from GE in separate cases.

A case against Jean Patrice Delia, 43, of Montreal, and Miguel Sernas, 40, of Mexico City, was unsealed last month. Delia is accused of taking thousands of electronic files from GE Energy while working in Schenectady. Sernas also previously worked for GE. They are accused of using the information to compete with GE through a different company.

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