GE Trade Secret Theft Examples: Cases and Consequences

Trade secret theft poses a significant threat to companies across various industries. General Electric Company (GE), a prominent player in sectors like aviation, aerospace, and power generation, has been a target of such illicit activities. This article delves into specific instances of trade secret theft involving GE, highlighting the methods employed by perpetrators and the ensuing legal repercussions.

Case 1: Jean Patrice Delia and Miguel Sernas

The FBI's Albany Field Office uncovered a conspiracy involving Jean Patrice Delia, a former GE performance engineer, and Miguel Sernas, another former GE employee. According to FBI Albany Special Agent Vin Manglavil, Delia believed he could download thousands of proprietary files-including a valuable trade secret-and launch a company to compete against his employer without anyone figuring out what he was up to.

The investigation revealed that Delia and Sernas stole elements of a computer program and mathematical model that GE used to expertly calibrate turbines used in power plants. GE's expertise in both manufacturing and servicing these turbines allowed them to optimize turbine performance for power plant operators worldwide, significantly reducing operating costs.

Delia, during his eight-year tenure at GE, began downloading thousands of files from the company's system, including those containing trade secrets. He also convinced an employee within the IT department to grant him access to files he had no legitimate reason to see, which contained proposals and cost models GE used to bid on new work and contracts. Court documents show he collected more than 8,000 files.

The breakthrough in the case occurred when GE discovered an unknown competitor bidding on a major power plant service contract in Saudi Arabia. Sernas was apprehended during a layover in Detroit while traveling from Mexico to Europe for the firm he started with Delia.

“Sernas was traveling on company business, carrying a company laptop that had the GE trade secret files on it,” Murphy said. Delia also pleaded guilty to conspiracy to steal trade secrets and is scheduled to be sentenced next month.

Case 2: Xiaoqing Zheng

Xiaoqing Zheng, a former General Electric engineer specializing in turbine sealing technology at GE Power in Schenectady, New York, was sentenced to two years in prison for conspiring to steal trade secrets to benefit China, according to the US Department of Justice (DOJ).

Zheng, 59, who worked for GE between 2008 and 2018, was convicted in March of one count of conspiracy to commit economic espionage following a four-week jury trial.

Assistant Attorney General Matthew G Olsen described Zheng’s case as an example of “textbook economic espionage”.

“Zheng exploited his position of trust, betrayed his employer and conspired with the government of China to steal innovative American technology,” Olsen said.

Case 3: Yanjun Xu

Yanjun Xu, a Chinese intelligence agent, was extradited to the United States to stand trial for targeting aviation and aerospace companies, including GE Aviation. Xu is the first Chinese intelligence agent ever extradited to the United States to stand trial.

Starting in December 2013, Xu allegedly targeted aviation companies in an attempt to steal trade secrets and other information. Xu allegedly recruited leaders at these companies and convinced them to travel to China, under the guise that they would give a presentation at a university. For example, Xu allegedly paid a GE Aviation employee to travel to China and give a presentation on GE’s engines, later requested the employee answer a variety of questions that would reveal trade secrets, instructed the employee regarding how to create a file directory for his GE-issued computer, and then directed him to download certain data onto a portable storage device.

Implications and Prevention

These cases underscore the importance of robust trade secret protection measures for companies like GE. The methods used by perpetrators range from internal breaches of trust to sophisticated espionage tactics orchestrated by foreign governments. Companies must implement comprehensive security protocols, including:

• Strict access controls to sensitive data
• Employee training on data protection and security awareness
• Monitoring of network activity for suspicious behavior
• Cooperation with law enforcement in investigating potential theft

TIP: Because the threat to a company’s trade secrets may include threats from foreign governments, companies should consider alerting and cooperating with law enforcement if they learn of potential theft.

Summary of Cases

The following table summarizes the key details of the cases discussed:

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