A Canadian man residing in China was apprehended in New York this week for purportedly trying to sell Tesla trade secrets to undercover law enforcement officers. His business associate, a Chinese national, remains at large.
The accused, Klaus Pflugbeil, 58, was the individual who met with officers in Long Island this week. He, along with his partner Yilong Shao, established a company in China, later expanding with offices in Canada, Germany, and Brazil. Their operation allegedly involved utilizing stolen information to facilitate the production of batteries for electric vehicles (EVs).
The two men are believed to have obtained the information during their employment with a Canadian manufacturer specializing in automated precision dispensing pumps and battery assembly lines. Although the Justice Department has not disclosed the company’s name (nor has it identified the automaker involved), various aspects of the case, including the acquisition of the manufacturer by the automaker in 2019, suggest that the companies in question are likely Hibar Systems and Tesla.
Read: Canada Charges EV Researcher With Espionage After Allegedly Sharing Trade Secrets With China
The Justice Department claims that Pflugbeil and Shao not only established their company using confidential secrets, which Tesla had invested at least $13 million in developing, but also actively sought additional original drawings to replicate.
Authorities further claim that the men knew what they were doing illegal because, in 2020, Pflugbeil emailed a series of drawings to a gear manufacturer to produce parts. In the message, he wrote that the information was confidential, and the drawings were identical to those created by Tesla, with the exception of the name of the company that owned them, and the drawing identification number, which had simply been reversed.
Ironically, the men also gave investigators a helping hand when their company ran ads online stating, “Are you looking for [Victim Company-1] Metering pumps and spare parts? Look no further.”
That led undercover FBI agents to attend a trade show for the packaging and processing industries in September 2023. There, they encountered Shao and posed as buyers interested in setting up a battery assembly line. They were provided with Pflugbeil’s email address and received a technical document containing Tesla’s proprietary information, falsely presented as their own. Subsequently, authorities arranged a meeting with Pflugbeil and apprehended him.
“This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge and, the Justice Department will hold accountable those who would so try cheat our country of its economic potential and threaten our national security,” said Assistant Attorney General Matthew Olsen of the Justice Department’s national security division.
Pflugbeil now faces a maximum penalty of 10 years in prison.
