A Canadian man residing in China was arrested in New York this week for allegedly attempting to sell Tesla trade secrets to undercover law enforcement officers. Klaus Pflugbeil, 58, was apprehended in Long Island, while his business associate, Chinese national Yilong Shao, remains at large.
Pflugbeil and Shao are accused of establishing a company in China, with offices later expanding to Canada, Germany, and Brazil, allegedly using stolen information to facilitate the production of batteries for electric vehicles (EVs).
The men are believed to have obtained the information during their employment with a Canadian manufacturer specializing in automated precision dispensing pumps and battery assembly lines. Although the Justice Department has not disclosed the company’s name, various aspects of the case suggest that the companies involved are likely Hibar Systems and Tesla, including the acquisition of the manufacturer by the automaker in 2019.
According to the Justice Department, Pflugbeil and Shao not only established their company using confidential secrets, which Tesla had invested at least $13 million in developing, but also actively sought additional original drawings to replicate.
In 2020, Pflugbeil allegedly emailed a series of drawings to a gear manufacturer, stating that the information was confidential. The drawings were said to be identical to those created by Tesla, with the exception of the company name and drawing identification number, which had been reversed.
The men inadvertently provided investigators with leads when their company ran ads online stating, “Are you looking for [Victim Company-1] Metering pumps and spare parts? Look no further.” This led undercover FBI agents to attend a trade show in September 2023, where they encountered Shao and posed as buyers interested in setting up a battery assembly line. They were provided with Pflugbeil’s email address and received a technical document containing Tesla’s proprietary information, falsely presented as their own. Subsequently, authorities arranged a meeting with Pflugbeil and arrested him.
Assistant Attorney General Matthew Olsen of the Justice Department’s national security division stated, “This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would so try cheat our country of its economic potential and threaten our national security.”
