A resident of China, Klaus Pflugbeil, was sentenced to 24 months in prison for conspiring to send trade secrets from a leading U.S.-based electric vehicle company, known as Victim Company-1. The sentencing took place in federal court in Central Islip and was presided over by Judge Joan M. Azrack. Pflugbeil is a Canadian and German national residing in China and, along with co-defendant Yilong Shao, who remains at large, owns a business based in China (Business-1). This business sold technology used to make batteries for electric vehicles.
Pflugbeil and Shao previously worked for a company acquired by Victim Company-1. They allegedly took trade secrets from their former employer and utilized them to build a competing business marketed as an alternative to Victim Company-1’s products. Pflugbeil pleaded guilty in June 2024.
Breon Peace, United States Attorney for the Eastern District of New York, stated: “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.” Peace emphasized the commitment of his office to protect American innovation and national security.
Assistant Attorney General Matthew G. Olsen commented on the case's significance: “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.”
Victim Company-1 specializes in manufacturing battery-powered electric vehicles and energy systems. In 2019, it acquired a Canadian Manufacturer known for automated precision dispensing pumps and battery assembly lines which included proprietary continuous motion battery assembly technology—a significant competitive advantage.
Both defendants are former employees of this Canadian Manufacturer; Shao also worked directly for Victim Company-1. By 2019 or earlier, they had planned to use these trade secrets for their own ventures.
The conspirators attempted to conceal their thefts by altering documents so they appeared original rather than copied versions of stolen materials.
In July 2020, Pflugbeil joined Business-1 founded by Shao which expanded globally including locations in Canada and Germany among others while continuing its operations using pilfered technology potentially affecting U.S market competition due largely because such advancements might flood global markets through Chinese automakers posing potential national security risks according Justice Department officials overseeing investigation into allegations surrounding illicit activities tied directly back against those charged under existing legal frameworks enforced nationwide within jurisdictional purview across America today involving similar cases prosecuted successfully thus far since inception last year alone when newly formed Disruptive Technology Strike Force began targeting illegal actors aiming prevent critical technologies falling hands authoritarian regimes hostile states worldwide
Undercover agents attended a Las Vegas trade show where they met Shao posing interest purchasing equipment related stolen intellectual property furthering probe eventually leading email exchanges between parties ultimately resulting indictment conviction guilty plea respective charges levied upon individuals responsible criminal conduct detrimental broader interests United States government citizens alike ensuring continued protection rights secured under law protecting integrity commerce vital economic stability prosperity future generations depend daily basis throughout nation abroad without exception anywhere else either now or foreseeable future foreseeable future outcomes scenarios considered plausible potentialities addressed accordingly appropriate authorities involved capacities relevant roles responsibilities assigned tasks complete fulfillment mandates duties entrusted them behalf public good collective welfare all concerned parties stakeholders affected impacted indirectly 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