A Canadian living in China was arrested and detained in New York on Tuesday after he and his business partner were accused of attempting to sell Tesla’s secret battery technology.
Federal prosecutors in Brooklyn asked a judge to carry Klaus Pflugbeil without bail on charges of stealing trade secrets. He was arrested after meeting with undercover agents on Long Island on Tuesday and attempting to sell them technology used to provide battery parts, the U.S. attorney’s office for the Eastern District of New York said in a press release.
The second man, 47-year-old Yilong Shao, a Chinese citizen, stays at large, the prosecutor’s office said. Late Tuesday, a public defender representing Pflugbeil, 58, didn’t reply to requests for comment.
Court documents show that the corporate whose secrets were stolen is “a leading American manufacturer of electric vehicles and battery power systems.” This description and other details in court documents match Tesla.
Both Mr. Pflugbeil and Mr. Shao are former employees of Hibar Systems, a Canadian company that sold battery technology Tesla acquired in 2019. According to prosecutors, that they had access to drawings and other documents that allowed others to repeat the production process.
Court documents show that after selling Hibar, the men began an organization that attempted to sell the corporate’s technology through Google ads, LinkedIn posts and YouTube videos. Prosecutors said they were aware the technology was proprietary.
Undercover agents met with Mr. Shao at a Las Vegas trade show in September and expressed interest in purchasing information that Tesla confirmed was secret. The agents persuaded Mr. Pflugbeil to go to New York, telling him they wanted to barter a settlement.
The arrest shows the federal government “will pursue individuals who engage in trade secret theft that puts U.S. businesses at a competitive disadvantage, undermines innovation and creates a potential threat to national security,” Breon Peace, U.S. attorney for the Eastern District of New York, wrote. in a press release.
