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Chinese Software Engineer Accused of US IP Theft

A Chinese software engineer is still on the run after being accused of stealing intellectual property for his new employer.

Xudong (“William”) Yao, 57, worked at a Chicago-based manufacturer of equipment for train engines from August 2014, according to a December 2017 indictment unsealed last week.

Yet after just two weeks in his role, Yao had downloaded 3000 files containing proprietary and trade secret information relating to the system that operates the manufacturer’s locomotives, the Department of Justice (DoJ) claimed.

Other information, including technical documents and source code, was also downloaded by Yao over the next six months. At the same time, he apparently reached out to and accepted a place at a Chinese firm that provides automotive telematics service systems.

After Yao’s employment was terminated for unrelated reasons in February 2015, he made copies of all the stolen trade secret info and traveled home to China to start his employment at the company there.

Flying from Chicago O’Hare airport in November that year, he is alleged to have had in his possession the stolen trade secrets, including nine copies of control system source code and system specs explaining how the code worked, according to the indictment.

Yao face a maximum 10 years behind bars if found guilty of the nine counts of theft of trade secrets. But it’s unlikely he will be caught, unless he makes the mistake of setting foot back in the US or an allied country.

China has long been considered a prodigious stealer of intellectual property, whether its state-backed cyber-espionage designed to give domestic companies an advantage, or the behavior of individuals looking to abuse their insider positions at Western companies.

In June, a Chinese engineer was found guilty of conspiring to illegally export US semiconductors with military applications back home.

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