U.S. charges ex-IBM software developer from China with espionage over stolen code

The U.S. Justice Department is charging a Chinese national with economic espionage charges, saying he stole source code from an American company with the intent of transferring it to the Chinese government. He is reported to have been an employee of IBM at the time of the alleged crime.

You can read the Justice Department indictment here in PDF form.


Jiaqiang Xu, 30, was charged in a six-count superseding indictment with economic espionage and theft of trade secrets, the department said in a statement. In December, he was charged with one count of theft of a trade secret, as prosecutors accused him of trying to sell the stolen code to other companies.

Authorities say Xu Jiaqiang stole then sold his former employer's source code to two undercover law enforcement agents, and planned to transfer the code to the National Health and Planning Commission of the People's Republic of China. He was already facing three charges of theft of trade secrets.

"Economic espionage not only harms victim companies that have years or even decades of work stolen, but it also crushes the spirit of innovation and fair play in the global economy," said Preet Bharara, U.S. Attorney for the New York's Southern District today. His office is handling the case.

From The Hill:

The indictment claims Xu resigned from an unnamed company that developed networking software in May, 2014 only to offer to sell the code to two agents. The agents claimed to be starting their own data warehousing business.

Xu allegedly told the agents that he "could take steps to prevent detection of the proprietary software's origins, including writing computer scripts that would modify the proprietary source code to conceal its origins," according to the Justice Department.

Mr. Xu will be arraigned Thursday. If he is convicted on all six theft of trade secrets and economic espionage charges, he could face a prison sentence of up to 75 years.

Related reporting: Associated Press, Wall Street Journal.