Engineer Indicted on Economic Espionage

Via SignOnSanDiego.com -

SAN JOSE – A Silicon Valley engineer stole trade secrets from a San Jose software company and tried to sell them to foreign governments, prosecutors alleged Thursday.

Xiaodong Sheldon Meng, 42, a Chinese national with Canadian citizenship, was indicted on 36 felony counts, including economic espionage to benefit a foreign government and violations of military technology export laws.

Prosecutors say Meng stole the underlying code for software made by Quantum3D Inc. that is used to train military fighter pilots, and tried to sell it to the Thai and Malaysian air forces and a company with ties to China's military.

No foreign government or agent was named as a conspirator in the case.

Under U.S. law, anyone attempting to sell such information overseas must first obtain a license from the State Department and is subject to strict regulations. Xiaodong never applied for or received such a license.

His case marks only the third time prosecutors have charged someone with economic espionage to benefit a foreign government, the most serious crime under the Economic Espionage Act of 1996. It carries up to 15 years in prison. Theft of trade secrets can bring 10 years.

Guilty pleas were expected Thursday afternoon in one of the other two cases under the economic espionage act. That case involves Fei Ye and Ming Zhong, two other Silicon Valley engineers with ties to China. Their conviction would be the first since the economic espionage law was enacted.

(Props to my friend Fergie for the find)