U.S. Attorney Breon S. Peace | U.S. Department of Justice
Klaus Pflugbeil, a resident of China and dual Canadian and German national, was sentenced to 24 months in prison by Judge Joan M. Azrack in Central Islip federal court. He was convicted for conspiring to send trade secrets from a leading U.S.-based electric vehicle company, referred to as Victim Company-1. Pflugbeil, alongside co-defendant Yilong Shao, who remains at large, owned a China-based business that sold battery-making technology.
United States Attorney Breon Peace stated that Pflugbeil "built a business in China to sell sensitive technology that belongs to a U.S. company," believing he was beyond the reach of U.S. law enforcement. Assistant Attorney General for National Security Matthew G. Olsen highlighted the implications of this case on national security and emphasized the Justice Department's commitment to protecting American innovation.
Victim Company-1 had acquired a Canadian manufacturer whose proprietary battery assembly technology provided a competitive advantage in lithium-ion battery manufacturing. Both Pflugbeil and Shao were former employees of this Canadian Manufacturer before it was acquired by Victim Company-1.
Pflugbeil and Shao used these trade secrets to establish Business-1, which marketed itself as an alternative source for products relying on Victim Company-1’s technology. Pflugbeil advertised these products online while claiming no infringement on intellectual property rights.
Undercover agents attended a trade show in Las Vegas in September 2023 and later received technical documentation from Pflugbeil containing Victim Company-1’s trade secrets. This proposal quoted over $15 million for the battery assembly line.
The investigation involved cooperation between various departments under the Disruptive Technology Strike Force initiative aimed at preventing critical technology acquisition by hostile states.
Assistant United States Attorneys Ellen H. Sise and Samantha Alessi, along with Trial Attorney Scott A. Claffee, are prosecuting the case with assistance from Paralegal Specialist Rebecca Roth.
