A Chinese couple ison trial for allegedly stealing GM trade secrets concerning its hybrid program. A Cadillac Escalade Hybrid is shown here.
Federal prosecutors have begun laying out their case against a Chinese engineer working for General Motors who, along with her husband, stands accused of stealing trade secrets aimed at helping the maker’s competitors in the booming Asian nation catch up on the development of advanced hybrid vehicles.
Former GM engineer Shanshan Du and husband Yu Qin are on trial for allegedly offering Chinese carmakers, including Chery Automobile Co. trade secrets the U.S. government contends were worth $40 million. It’s the latest in a series of federal efforts to crack down on Chinese spying and comes about a year after a Ford engineer was also found guilty of spying on his employer for the Chinese.
“Partners in life, partners in business and partners in crime,” proclaimed U.S. Prosecutor Michael Martin, as he began laying out the government’s case. “The case,” he argued, “is about theft as well as deceit.”
The couple were indicted in July 2010 on three counts of trade theft and wire fraud, the U.S. Dept. of Justice also charging Win with obstruction of justice. Both have pleaded not guilty.
The prosecution claims Du, who worked for GM between 2000 and early 2005, intentionally sought a transfer to the company’s hybrid program and there began copying documents for her husband. That accelerated, the government alleges, in the days after she was offered a severance package.
The case revolves around claims that the documents were then uploaded to the couple’s home computer, moved to a portable hard drive and then offered for sale to companies in China that might be interested in acquiring the secrets.
Chery has had run-ins with GM before, the U.S. maker previously attempting to block the Chinese firm from selling a clone of a vehicle also marketed by GM’s joint venture in China. The Chery QQ significantly outsold the Chevrolet Spark, in large part because of a major price discount.
The alleged spy effort came undone when workers at husband Qin’s company, Controled Power Co., discovered a bag with a hard drive in it containing the allegedly stolen documents. Of 16,000 files, the case centers around just 18.
The obstruction of justice charge stems from the government’s allegation that Qin tried to disregard relevant evidence by shredding it and then tossing it into a dumpster in May 2006.
Wife Du told FBI investigators it was a “big misunderstanding,” a comment defense attorneys are hoping will help win an acquittal. Qin’s lawyer, Frank Eaman, described the documents as completely useless,” and suggested the case has more to do with “fear” about China’s growing economic clout than any actual incident of industrial espionage.
There’s no question that concerns about China have been mounting. The country has shown a general disregard for intellectual property rights, with pirating of software, music and films a common occurrence. The Chinese have been accused of supporting a vast network of hackers who have broken into U.S. computers, both those operated by businesses and government.
Over the last three years, U.S. prosecutors have brought at least a dozen Chinese industrial espionage cases to court, including the GM and Ford incidents. Others are reportedly under study.
The court case is expected to last several more weeks.