A Canadian citizen based in China has been arrested in the United States for allegedly stealing the trade secrets of Tesla and conspiring to sell them to undercover police.

Canadian Based in China Arrested in US for Allegedly Stealing Trade Secrets of Tesla

According to Reuters, Klaus Pflugbeil, 58, a Canadian citizen who started a business in China that sells technology used in electric vehicles, was arrested in Long Island, New York, on Tuesday morning, federal prosecutors in Brooklyn said.

According to the prosecutors, Pflugbeil, who lives in Ningbo, China, traveled to Long Island to meet with businessmen to negotiate a price for the information, but only to discover that the businessmen were undercover federal agents.

Pflugbeil and his business partner, Yilong Shao, allegedly developed their business using trade secrets belonging to the "leading" American electric vehicle company. The prosecutors said Shao was also charged but remained at large.

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Tesla Acquired Canadian Firm Hibar

The prosecutors did not specifically name the US-based company but said it acquired a battery manufacturing firm in Canada in 2019. That description resembles Tesla's acquisition of the Hibar Systems in Richmond Hill, Ontario. According to the prosecutors, Pflugbeil and Shao had previously worked at the Canadian company.

In a statement, Breon Peace, US attorney for the Eastern District of New York, said: "The defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets."

According to the Associated Press, Pflugbeil and Shao were charged with conspiracy to transmit trade secrets, which carries a maximum sentence of 10 years in prison if convicted. Pflugbeil was reportedly scheduled to appear in Brooklyn federal court on Tuesday afternoon. 

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