Former GE Engineer Gets Two-Year Prison Term in Espionage Case

Jan. 4—ALBANY — A federal judge sentenced a former engineer at General Electric in Schenectady to two years in prison on Tuesday in U.S. District Court for conspiring to send information to benefit the Chinese government.

Xiaoqing Zheng, 59, of Niskayuna, sat beside his attorney, Kevin Luibrand in the first-floor courtroom as U.S, District Judge Mae D'Agostino also ordered him to pay a $7,500 fine.

"(Zheng's) intent was to steal profits out of GE's pocket and place those profits in China's pocket instead," the judge said.

D'Agostino determined the amount of loss to be $1,058,800. She said American companies have a right to expect that their property not be stolen and sent to the U.S.'s biggest competitor in China.

"I believe the crime that Dr. Zheng committed to be extremely serious," the judge said. "Do I believe that Dr. Zheng will do anything like this again? I don't."

D'Agostino imposed a sentence far below the recommended 5 1/4 -to-6 1/2 -year prison term outlined under federal sentencing guidelines. She said the defendant showed humility and has, by his own admission, made a positive adjustment to the situation. She noted he has no prior criminal record.

D'Agostino said she did not believe that Zheng was trying to help GE, as the defense argued.

"I don't doubt that (Zheng) committed conspiracy to commit economic espionage," she said. "That, I think, the jury got correct ... I think he was intending to benefit himself."

In March, jurors found Zheng guilty of one count of conspiring to commit economic espionage. They acquitted him of four other counts and deadlocked on seven other counts. Federal prosecutors asked the judge to impose a sentence of eight years and one month. Luibrand requested probation and home detention.

On Aug. 1, 2018, the FBI arrested Zheng after searching his home on Cephalona Drive. He had just returned from his native China, where he had stayed for three weeks. While in the communist country, Zheng spoke to the Communist Party secretary for Liaoyang Province at a signing ceremony. It was tied to a deal involving a business managed by the defendant.

The arrest followed an investigation that started in 2016 after FBI agents in Cincinnati working on a separate case saw a website in which Zheng was delivering a presentation in China on July 1, 2016. At the time, Zheng was addressing the Jiangsu Province Nanjing University of Aeronautics and Astronautics College of Energy and Power Energy Engineering in China. FBI agents learned that since 2012, Zheng had been a member of a Chinese government initiative — the Thousand Talents Program — intended to recruit talented researchers to China.

The FBI, learning that Zheng worked at GE in Schenectady since 2008, notified security officials at the company. Agents discovered that in 2016, Zheng informed GE he held business interests in two Chinese businesses: Nanjing Tianyi Aeronautical Technology and Lioning Tianyi Aviation Technology. The first company worked with the same turbine-sealing technology that Zheng worked with at GE.

In June 2018, GE placed a monitor on Zheng's work computer. They learned that the next month, Zheng emailed 40 files to himself before traveling to China for three weeks. He was arrested when he returned. By the time of his arrest, agents had seized Zheng's desktop computer, iPhone and publications, including one about how credited companies could get financial breaks on certain technologies important to the Chinese government.

Zheng is free on a $100,000 bond.

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