A Canadian man living in China was arrested Tuesday and held in New York after he and a business partner were accused of trying to sell secret battery-making technology owned by Tesla.
Federal prosecutors in Brooklyn have asked a judge to hold Klaus Pflugbeil without bail on a charge of stealing trade secrets. He was arrested after meeting with undercover agents on Tuesday in Long Island and trying to sell them technology used to make battery components, the US Attorney’s office for the Eastern District of New York said in a statement.
The second man, Yilong Shao, 47, a Chinese national, remains at large, prosecutors said. A public defender representing Mr. Pflugbeil, 58, did not respond to requests for comment late Tuesday.
Court documents identified the company whose secrets were stolen only as “a leading US-based manufacturer of battery electric vehicles and battery energy systems.” That description and other details in the court documents match Tesla.
Mr. Pflugbeil and Mr. Shao are both former employees of Hibar Systems, a Canadian company that sold battery-making technology that Tesla acquired in 2019. They had access to plans and other documents that allowed others to copy the manufacturing process, according to prosecutors.
After selling Hibar, the men formed a company that tried to sell the company’s technology through Google ads, LinkedIn posts and a YouTube video, according to court documents. They knew the technology was proprietary, prosecutors said.
Secret agents met Mr. Shao at a trade show in Las Vegas in September and expressed interest in buying the information, which Tesla had confirmed was secret. The agents persuaded Mr. Pflugbeil to visit New York by telling him they wanted to make a deal.
The arrest demonstrates that the government “will prosecute those who engage in trade secret theft that puts American businesses at a competitive disadvantage, undermines innovation and creates a potential national security risk,” said Breon Peace, U.S. Attorney for the Eastern District of the U.S. New York. , said in a statement.
