Two Silicon Valley computing engineers have been charged with economic espionage for allegedly conspiring to steal sensitive microchip designs they hoped to use to go into business with the Chinese military.
Lan Lee, an American, and Yuefei Ge, who is Chinese, are accused of stealing trade secrets from their employer, NetLogics Microsystems, and a second company, the Taiwan Semiconductor Manufacturing Corporation.
The two men allegedly set up a business, SICO Microsystems, for the purpose of developing and marketing products using the stolen designs. They then attempted to secure funding from China's General Armaments Department and a Chinese government programme created to develop communications and laser technologies for the military, according to a statement from prosecutors.
The stolen data related to the design and development of microchips and processors that could be used in military technology. The men had been about to stand trial on just the theft of the computer chip designs when they were charged with the more serious crime of economic espionage on Wednesday.
The new indictment accuses Lee, 42, of Palo Alto, and Ge, 34, of San Jose, of orchestrating the computer-chip plot so they could go into business with the Chinese military.
The men, who have been released on bail of 300,000 dollars each, are both charged with two counts of economic espionage, two counts of theft of trade secrets and one count of conspiracy. They face up to 15 years in jail and a 500,000 dollar fine if convicted.
In July, Robert Mueller, the FBI director, told Congress that China's espionage operations in the US were a "substantial concern" and Beijing was stealing American secrets to fuel its rapidly-developing military and economy.
Only three people have been convicted in the US of economic espionage, described as the theft of trade secrets to benefit a foreign government and the most serious crime under the Economic Espionage Act of 1996. All the convictions resulted from activity in Silicon Valley.
"The vigorous enforcement of intellectual property statutes increases the economic vitality of this region, and adds to the security of our nation as a whole," said Scott Schools, the area's chief federal prosecutor.
"This office is committed to the prosecution of individuals who seek to benefit foreign governments or instrumentalities with stolen trade secrets."