A ten year veteran of the U.S. automaker Ford Motor Company pleaded guilty in federal court on November 17 to charges that he stole company secrets, including design documents, worth more than $50 million and sharing them with his new employer: the Chinese division of a U.S. rival of Ford’s.
Xiang Dong (“Mike”) Yu admitted to copying some 4,000 Ford Documents to a external hard drive, including system design specifications for Ford’s cars after surreptitiously taking a job with a competitor in 2006.
Under the plea agreement, announced last week, Yu faces a sentence ranging from five to six years in prison and a fine of up to $150,000 for a theft of trade secrets valued at between $50 million and $100 million, according to a statement by Barbara L. McQuade, the United States Attorney for the Eastern District of Michigan.
According to the Plea Agreement, Yu obtained documents containing prized Ford design documents, including those for components such as an Engine/Transmission Mounting Subsystem, Electrical Distribution system, Electric Power Supply, Electrical Subsystem and Generic Body Module. Yu was a Product Engineer at Ford, where he had worked since 1997, but the documents taken had no connection to his work at Ford.
Yu did not inform Ford of his decision to take a position with a competitor prior to leaving the country with the documents on December 20, 2006, He later e-mailed his supervisor at Ford from China to inform him that he was leaving the company. Yu later accepted a job with a Chinese based competitor of Ford’s, Beijing Automotive Company, of Shenzhen, China, in November, 2008.
He was taken into custody by the FBI in October, 2009, after stopping over in Chicago on a return trip to China. An analysis of the laptop computer Yu carried at the time included copies of 41 Ford system design specification documents.
Theft of industrial trade secrets is a growing problem, as technology and the Internet make wholesale theft of data practical, and as developing nations enlist insiders to help them bridge military and competitive gaps with more advanced nations and firms from the West. In October, agents arrested and raided the home of a Raytheon employee and expert on warhead design. The past two years have also brought several high-profile stories about targeted attacks aimed at prominent firms in technology and energy.
In security circles, experts have taken to referring to such sophisticated foes as “advanced persistent threats,” a term that euphemistically refers to nation-state spying by the likes of China, Russia and other nations, or companies backed by foreign regimes.