Klaus P., an entrepreneur with Canadian and German citizenship and resident in China, recently confessed to having engaged in corporate espionage at Tesla. According to a report in the New York Times, the entrepreneur was arrested in March of this year and was subsequently held in custody in New York. The German-Canadian entrepreneur and another business partner were accused of trying to sell intellectual property of the electric car manufacturer Tesla for the production of batteries. The entrepreneur has now admitted the allegations, the US Department of Justice explains in a press release.

The entrepreneur was arrested after he wanted to meet with a supposed buyer of the trade secrets on Long Island – but they turned out to be undercover investigators. What was particularly piquant was that P. was the managing director of the Canadian company Hibar, which developed and sold battery manufacturing technologies. Tesla had bought Hibar in 2019 – and with it the battery production technologies that the German-Canadian entrepreneur now allegedly wanted to resell. P. is said to have set up locations in China, Canada and Brazil, but also in Heidenheim, Germany, for the sales of his company.

In October of last year, P. was still traveling for Hibar at the International Radio Exhibition in Berlin, reports T-Online. Until recently, the commercial register also listed the entrepreneur as one of two managing directors of the Heidenheim branch. Hibar is now listed as “permanently closed” on the Google Maps map service. According to the commercial register, the GmbH has since been dissolved, with the last entry being May 21 of this year.

However, P. is apparently still active with another company in the same business area: The company Hife, which also has branches in Canada, China, Brazil and Heidenheim and deals, among other things, with the sale and maintenance of “dosing pumps and machines for the production of batteries and filling systems”, is also managed by Klaus P. in Heidenheim. This is evident from an entry in the commercial register. The partnership agreement is dated May 2022.

As T-Online reports, Hibar did not want to comment on the allegations against P. Matthew G. Olsen, Assistant Attorney General of the US Department of Justice’s National Security Division, explains: “Although [P.] had agreed to protect the sensitive and patented technology, he decided to flee to China with the trade secrets, where he wanted to gain an unfair and illegal advantage in critical industries such as electric vehicle manufacturing.” But then he made the fatal mistake of wanting to meet the supposed customer in the USA and the handcuffs clicked.

“The defendant brazenly took what was not his and used stolen trade secrets for his personal profit, even though he knew that these valuable trade secrets rightfully belonged to an American company,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s guilty plea demonstrates how this office will swiftly bring to justice those who appropriate intellectual property belonging to American companies, particularly when the use of the technology poses a national security risk.”

The court documents trace the espionage: A “leading manufacturer of battery-powered electric vehicles and battery systems” acquired a Canadian-based manufacturer of […] battery assembly lines in 2019. These battery assembly lines contained or used a patented technology that now belongs to Tesla and that gives the electric car manufacturer a “significant competitive advantage in the production of batteries”.

According to the documents, both the German-Canadian entrepreneur and a Chinese business partner and still fugitive, alleged accomplice, Yilong S., had been planning to sell Tesla’s trade secrets since 2019 at the latest. P. told his business partner that he had “a lot of original documents” on the technology and was looking for further “original drawings” of the trade secrets. The Chinese business partner S. then confirmed that “we have all the original assembly drawings in PDF format”.

The two entrepreneurs took appropriate measures to conceal the origin of the documents. For example, the defendant P. wrote a note to his partner about one of the documents, saying: “It has a different format, so it looks very real and not like a copy.”

According to the findings of the Ministry of Justice, in July 2020 P. then moved to “Business-1”, a company that had previously been founded by his Chinese business partner and now has locations in China, Canada, Germany and Brazil. “Business-1” produces the same precision fuel pumps and battery assembly lines that the Canadian manufacturer developed – this company is apparently Hife.

Hife published online ads on Google, YouTube and LinkedIn, which said things like: “Hife| Replaces Hibar Pumps

In September 2023, undercover FBI agents then visited a trade fair for the packaging and processing industry in Las Vegas. The undercover agents posed as businessmen interested in purchasing a battery assembly line from Hibar to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to the suspects S. and P. by email at the trade fair. In mid-November 2023, P. then emailed an undercover agent a detailed 66-page offer for the technical documentation of a battery assembly line, which is one of Tesla’s trade secrets. The document contained at least half a dozen drawings that actually belonged to Tesla.

P. pleaded guilty to disclosing trade secrets – the trial is scheduled for October this year and he faces a maximum sentence of ten years in prison.

By Tobias Stahl

The original of this article “German faces 10 years in prison for Tesla espionage” comes from EFAHRER.com.