A former software engineer for IBM was indicted Tuesday on multiple charges of economic espionage in relation to a scheme that prosecutors believe was done to benefit an agency of the Chinese government.
Xu Jiaqiang, 30, now faces six new counts of economic espionage and theft of trade secrets pursuant with the unsealing Tuesday of a superseding indictment in U.S. District Court.
Authorities initially arrested Mr. Xu in December 2015 and charged him with one count of stealing trade secrets after the Justice Department accused him of pilfering proprietary computer code from his former employer. As alleged in the superseding indictment, however, the computer programmer intended on providing the stolen code to the People’s Republic of China.
Mr. Xu allegedly “stole, duplicated and possessed the proprietary source code with the intent to benefit the National Health and Planning Commission of the People’s Republic of China,” a government agency spawned from China’s former Ministry of Health, the indictment asaid.
The Justice Department is accusing Mr. Xu of blatantly copying the source code pertaining to a clustered file system developed and marketed by his former employer. Although the name of the company is not specified in charging documents, Mr. Xu’s profile is still included on IBM’s website.
Following his departure from IBM in 2014, Mr. Xu allegedly copied the source code and offered it to two undercover agents, all the while claiming 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,” the indictment said.
In addition to offering that code to the undercover agents, authorities allege the programmer planned on providing it to the Chinese government.
“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,” prosecuting U.S. Attorney Preet Bharara of the Southern District of New York said in a statement Tuesday. “Economic espionage is a serious federal crime, for which my office, the Department of Justice’s National Security Division, and the FBI will show no tolerance.”
Mr. Xu pleaded not guilty when he was charged last year with one county of stealing trade secrets, and will be formally arraigned Thursday in New York City with regards to allegations laid out in the indictment unsealed this week.
The three counts of economic espionage carry a maximum sentence of 15 years in prison for each count, the Justice Department said; the three counts of theft of a trade secret carry a maximum of 10 years for each count.
Representatives with IBM did not respond to BBC’s request for comment Tuesday.