A Canadian man living in China was arrested in New York on Tuesday for allegedly trying to sell secret battery manufacturing technology belonging to Tesla, along with his business partner.
Federal prosecutors in Brooklyn sought to detain Klaus Pflugbeil without bail for theft of trade secrets. He was apprehended after meeting with undercover agents on Long Island and attempting to sell them technology used in battery production, according to the U.S. attorney’s office for the Eastern District of New York.
The man’s business partner, Yilong Shao, a Chinese citizen aged 47, is still at large. A public defender representing Mr. Pflugbeil, aged 58, did not provide any comments as of late Tuesday.
The stolen secrets were linked to a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems, which aligns with Tesla’s profile as per court documents.
Both Mr. Pflugbeil and Mr. Shao were former employees of Hibar Systems, a Canadian company specializing in battery manufacturing technology that Tesla acquired in 2019. They possessed access to drawings and documents enabling replication of the manufacturing process, according to prosecutors.
Following the sale of Hibar, the men established a new company to market the stolen technology through various online channels, knowing it was proprietary, as per court records. The undercover agents engaged with Mr. Shao at a trade show in Las Vegas last September and expressed interest in purchasing the confidential data validated by Tesla. Subsequently, they convinced Mr. Pflugbeil to travel to New York for negotiations.
The arrest signifies the government’s commitment to prosecuting individuals involved in trade secret theft that harms U.S. businesses, impedes innovation, and poses potential national security risks, stated Breon Peace, the U.S. attorney for the Eastern District of New York.
