US charges Chinese employee of IBM with 'economic espionage' for China

A former Chinese employee of tech giant IBM was charged with economic espionage for allegedly stealing proprietary source code to hand over to a Chinese government agency.
A former Chinese employee of tech giant IBM was charged with economic espionage for allegedly stealing proprietary source code to hand over to a Chinese government agency.PHOTO: REUTERS

WASHINGTON (AFP) - The United States authorities charged a former Chinese employee of tech giant IBM with economic espionage on Tuesday (June 14) for allegedly stealing proprietary source code to hand over to a Chinese government agency.

The Department of Justice said Xu Jiaqiang had been a developer for an unnamed US company when he took the source code, intending to provide it to the Chinese National Health and Planning Commission, where he previously worked.

At the same time, he offered the code, the essential kernel of software programs often held tightly by their owners, to US FBI agents posing as tech company officials seeking software for their company.

After an investigation of more than one year, Xu was arrested last December and was charged with theft of trade secrets.

Tuesday's indictment supersedes that charge with three counts of economic espionage, each of which could bring 15 years in prison, and three counts of trade secret threat, which carry 10 year sentences apiece.

The indictment did not name IBM, and the company did not return queries. Justice officials would also not confirm IBM's involvement.

But the company website and a LinkedIn profile both name a Xu Jiaqiang as a developer at IBM, and press reports since the December arrest also put him at the company.

"Xu allegedly stole proprietary information from his former employer for his own profit and the benefit of the Chinese government," US Assistant Attorney-General John Carlin said in a statement.

"Those who steal America's trade secrets for the benefit of foreign nations pose a threat to our economic and national security interests."