Software engineer gets a year in prison for sending trade secrets to China

LOS ANGELES (CN) — A Southern California software engineer was sentenced on Thursday to one year and one day in federal prison for stealing his employer’s proprietary technology, which prosecutors claim he used to market his own business to a China-based company.

Liming Li, 66, of Rancho Cucamonga, pleaded guilty in February to one count of possession of trade secrets. U.S. District Judge John Kronstadt also sentenced Li to three years of supervised release, a $14,000 fine and $18,000 in restitution.

The government accused Li of stealing thousands of proprietary source code files containing trade secrets relating to metrological technology and equipment from his prior employer, using the stolen data to get hired by a Chinese competitor and seeking to pass the trade secrets off as source code developed for that competitor.

“Defendant’s criminal conduct in this case does not reflect a mere momentary lapse of judgment,” prosecutors with the U.S. attorney’s office in Los Angeles argued in seeking an 18-month prison term. “Defendant stole thousands of proprietary files and saved and accessed them over a period of five years to market his own consulting company and take in over $200,000.”

Li, according to the government, fraudulently relabeled the trade secret files to pass them off as belonging first to his own consulting business, JSL Innovations, and then to Suzhou Universal, a Chinese chain and bearing manufacturer.

Li, who was born in China and obtained a doctorate in applied mathematics from Claremont Graduate University in California, worked for more than two decades at a U.S. subsidiary of Mitutoyo Corp. that specializes in precision measuring instruments and metrological technology and equipment.

In 2018, Li said in his sentencing memorandum, he was fired because he went over the head of his local boss to directly pitch a research development plan to the company’s Japanese headquarters.

In a bid for lenience from the judge, Li’s attorneys said he made a terrible mistake when he kept his employer’s proprietary data after he was terminated. However, they said, there has been no evidence that he shared this data with other businesses, including the Chinese company, Suzhou Universal, he worked for from 2020 until his arrest in May 2023.

“He has pled guilty to doing so and has had his life turned upside down as a result,” Li said in his sentencing memorandum. “However, he is steadfast that he never gave any of his former employer’s information to anyone, nor did he ever intend to.”

The case against Li was brought under the auspices of the Disruptive Technology Strike Force, which was created by the Biden administration in 2023 and is co-led by the Departments of Justice and Commerce. The Strike Force aims to counter efforts by “hostile” nation-states to illicitly acquire sensitive U.S. technology.

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