Trade secrets for GM hybrid technology -- the maker's prototype Saturn Vue plug-in shown here -- were allegedly taken by a Chinese engineer and her husband.

A federal grand jury in Detroit has indicted two engineers of Chinese descent with corporate espionage that had targeted General Motors Corp. hybrid technology by stealing documents with a market value of $40 million.

The case was considered significant enough for FBI agents to keep the pair under surveillance long enough for agents to watch as they disposed of shredded documents in a dumpster behind a suburban Detroit shopping mall.

Charged in the seven-count indictment are Yu Qin, aka Yu Chin, 49, and his wife, Shanshan Du, aka Shannon Du, 51, of Troy, Michigan.

From December 2003 and continuing through May 2006, according to the indictment, the defendants conspired to possess trade secret information of General Motors relating to hybrid vehicles, knowing that the information had been stolen, converted, or obtained without authorization.

The indictment charges that Du, while employed by GM, provided GM trade secret information relating to hybrid vehicles to her husband, Qin, for his benefit and for the benefit of  their own privately-held  company, Millennium Technology International Inc.

Approximately five days after Du was offered a severance agreement by GM in January 2005, she copied thousands of GM documents, including trade secret documents, to an external computer hard drive used for MTI business.

A few months later, Qin moved forward on a new business venture to provide hybrid vehicle technology to Chery Automobile, a Chinese automotive manufacturer based in China and a competitor of GM.

The indictment further alleges that in May 2006, the defendants possessed GM trade secret information without authorization on several computer and electronic devices located in their residence.

The indictment also charges that on May 23, 2006, the defendants drove to a dumpster behind a grocery store where defendant Qin discarded plastic bags containing shredded documents sought by federal grand jury subpoenas seeking information relating to MTI and hybrid vehicles.

“GM has been involved in the  development and production of hybrid vehicles for over a decade and has invested many millions of dollars in the research and development of hybrid vehicles,” Barbara McQuade, United States Attorney for the Eastern District of Michigan, said. “As our auto industry works to find new areas of innovation, such as hybrid technology,\we will not tolerate the theft of our trade secrets by foreign competitors.”

Added Arthur Arena, Special Agent in Charge Arena of the FBI’s Detroit office, “Theft of trade secrets is a threat to national security and investigating allegations involving theft of trade secrets is a priority for the FBI. The FBI will continue to aggressively pursue allegations involving the theft of trade secrets.”

The conspiracy to possess trade secrets without authorization count and each of the counts charging unauthorized possession of trade secrets carry a maximum penalty of 10 years’ imprisonment and a $250,000 fine.

If the pair are convicted, the wire fraud counts each carry a maximum penalty of 20 years’ imprisonment and a $250,000 fine. The obstruction of justice count carries a maximum penalty of 20 years’ imprisonment and a $250,000 fine.

It is unclear if Chery was knowingly involved in the alleged theft and, if so, whether any actions might be taken against the Chinese automaker.  It would not be the first time GM and Chery have clashed over trade secrets, however.  The two battled over claims that Chery used a GM design to build its old QQ model, a virtual copy of a vehicle sold in China as the Chevrolet Spark.  Efforts to halt its production failed, however.