Xu Jiaqiang, Theft of Trade Secret, New York 2015

Grimy Times Exclusive

Xu Jiaqiang, a 35-year-old former developer from White Plains, New York, was arrested yesterday by the FBI for allegedly stealing a valuable trade secret from his former employer.

The theft, which occurred between November 2010 and May 2014, involved Xu’s unauthorized access to and theft of proprietary source code from his former employer, a U.S. company that develops and markets a clustered file system. The code, which facilitates faster computer performance by coordinating work among multiple servers, was stored behind a company firewall and accessible only by a small subset of employees.

After resigning from the company in May 2014, Xu allegedly communicated with undercover law enforcement officers, discussing his past experience with the company and the proprietary software. He then sent a sample of the code to the officers, which was later confirmed to be proprietary material by a company employee.

The arrest was announced by U.S. Attorney Preet Bharara and FBI Assistant Director-in-Charge Diego Rodriguez, who stated that Xu’s actions were a serious federal crime that drained the lifeblood of innovation and competition.

Xu was arrested yesterday in White Plains and presented today in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy. He is currently being held without bail pending a hearing.

According to the allegations, Xu’s theft of the trade secret resulted in significant economic harm to his former employer, which took significant precautions to protect the proprietary source code as a trade secret. The Victim Company took precautions in part because the Proprietary Software and the Proprietary Source Code are economically valuable, which value depends in part on the Proprietary Source Code’s secrecy.

The exact charges against Xu are Theft of Trade Secret (18 U.S.C. § 1832), and he faces up to 10 years in prison if convicted. The case is currently under investigation by the FBI’s New York Office, and the U.S. Attorney’s Office for the Southern District of New York.

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