- A man who was selling stolen trade secrets is now going to prison.
- The FBI caught the criminal through an undercover operation.
- A second man connected to the case is reportedly still at large.
Klaus Pflugbeil thought he had it all figured out. Swipe some trade secrets, make $1.3 million, and quietly build a tech business overseas. Instead, the former employee of a company bought by Tesla is now facing two years in federal prison. Why? Because, unsurprisingly, the FBI has little patience for blatant industrial espionage. His partner is allegedly still at large.
Authorities nabbed Pflugbeil back in March after he allegedly attempted to sell sensitive tech to someone he thought was a buyer. It wasn’t. It was an undercover FBI agent ready to ruin his day. According to the Department of Justice, Pflugbeil “built a business in China to sell the sensitive technology that belongs to a U.S. company.” That’s a sanitized way of saying he and his partner cooked up a scheme to peddle trade secrets while hoping nobody in America would notice. They noticed.
Read: Tesla Settles Lawsuit Against Rivian Over Claims It Stole Trade Secrets
As we noted in our original coverage, the DOJ doesn’t specifically say that Pflugbeil stole these secrets from Tesla. However, several factors, including its acquisition of a Canadian tech manufacturer (Hibar Systems) in 2019, for whom Pflugbeil used to work for, point to Tesla as the “leading U.S.-based electric vehicle company” the official records refer to.
“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,” stated United States Attorney Peace. “Today’s sentencing sends a clear message to would-be offenders: My office will do everything it can to protect American innovation and national security no matter where you try to hide.”
In that same vein, it’s worth noting that Pflugbeil’s co-defendant, Yilong Shao, remains at large according to the DOJ. Evidently, the pair were quite blatant in their work. The DOJ says that Pflugbeil sent several documents including trade secrets to Shao and even said things like “[it’s] in a different format, so it looks very original and not like a copy.” The pair then advertised their products, precision dispensing pumps, and battery assembly lines, across the globe.
They showed up at trade shows, sent emails, and even claimed directly that their products didn’t infringe on any patents, copyrights, or other intellectual property. Somewhat ironically, Pflugbeil’s LinkedIn profile features a quote from Benjamin Jowett as his banner: “The way to get things done is not to mind who gets the credit for doing them,” it says. Perhaps he should’ve made sure that Tesla got full credit for the tech he professed to create.
