Ex-Apple engineer arrested on his way to China, charged with stealing autonomous-car secrets

For about two years, Xiaolang Zhang was privy to information to which many in the tech world can only dream of having access: the inner workings of Apple Inc.’s secretive autonomous-car research.

Over the weekend, the former Apple engineer was arrested by U.S. authorities at the San Jose International Airport while preparing to board a flight to China and charged with stealing proprietary information related to Apple’s self-driving car project. At the time of his arrest, he said he was working for a Chinese start-up that is also developing autonomous vehicles, according to a criminal complaint filed in federal court in San Jose on Monday by the FBI and the U.S. attorney’s office.

Zhang, who started working at Apple in December 2015, was accused of downloading files that included engineering schematics and technical reports before leaving to work for Xiaopeng Motors, a Guangzhou-based company also known as XMotors, documents said.

As a hardware engineer on Apple’s autonomous-vehicle development team, Zhang’s position granted him “broad access to secure and confidential internal databases containing trade secrets and intellectual property,” according to the complaint.

Aside from making general comments about its interest in developing self-driving technology, Apple has not openly discussed its research, leaving many to wonder what exactly the company is working on. Information is even kept from most of the company’s employees. About 5,000 employees out of more than 135,000 are “disclosed” on the project, meaning they are working on the project or know details about it, the complaint said. Even fewer people, about 2,700 “core employees,” have access to the project’s databases.

According to the complaint, information about the project “is a closely guarded secret that has never been publicly revealed.”

“Apple takes confidentiality and the protection of our intellectual property very seriously,” company spokesman Tom Neumayr told Bloomberg in an email. “We’re working with authorities on this matter and will do everything possible to make sure this individual and any other individuals involved are held accountable for their actions.”

Zhang made his first court appearance Monday and was remanded in custody, according to court documents. His lawyer, Tamara Crepet, a federal public defender, could not be reached for comment.

The complaint states that Apple first became suspicious of Zhang in late April. Zhang had just returned to the company after taking paternity leave when he informed his supervisor April 30 that he would be resigning. He said he wanted to move back to China, citing his mother’s poor health as the reason, but later disclosed that he intended to work for XMotors, the FBI complaint said. Shortly before this meeting and while on leave, authorities say, Zhang had taken a trip to China with his family.

An internal investigation revealed that in the days before Zhang’s resignation, his Apple network activity “increased exponentially,” the complaint said. Authorities allege that Zhang had downloaded “copious pages of information” from various confidential databases. Records and closed-circuit TV footage also showed Zhang entering the autonomous-car software and hardware labs April 28, documents state. He was seen leaving less than an hour later carrying a computer keyboard, some cables and a large box.

Armed with that evidence, Apple called Zhang in for a second interview May 2.

He initially denied going to Apple’s lab to take anything. But Zhang later admitted taking two circuit boards and a server, according to documents. He also admitted to using Airdrop, a file transferring system for Apple devices, to upload company data to his wife’s personal laptop, the complaint said. Zhang explained that he had taken the hardware because he thought it would be useful to him on another project. As for the files, he said he had wanted to study the data on his own time. Additionally, Zhang said he had been working to secure a job with XMotors while still employed by Apple.

After examining his wife’s laptop, Apple’s digital forensic investigations team discovered that more than half the data on the computer was “highly problematic,” the complaint said. A complete evaluation of the files is ongoing.

Zhang was “voluntarily terminated” May 5 and, according to the complaint, said he is now employed by XMotors at its Mountain View, Calif., office.

On July 7, authorities learned that Zhang had bought “a last-minute round-trip airline ticket” for himself to Beijing, with the final destination of Hangzhou, China. The flight was scheduled to depart that same day. At the airport, Zhang was intercepted by federal agents and “arrested without incident.”