published Jul 16, 2018 5:26:07 PM, by Joel Rosenblatt
(Bloomberg) —

A former Apple Inc. engineer charged with stealing self-driving car secrets for a Chinese startup pleaded not guilty in federal court in San Jose, California.

Zhang Xiaolang entered the plea through his lawyer Monday. He was arrested just before boarding a flight to China on charges that he downloaded proprietary files while preparing to leave the iPhone maker and go to work for Guangzhou-based Xiaopeng Motors, also known as Xmotors.

U.S. Magistrate Judge Virginia K. DeMarchi had previously granted Zhang’s release. He’s working to secure bail of $300,000 with property, according to his lawyer, Daniel Olmos. Zhang, wearing a dress shirt and khakis and accompanied by a woman, was silent during Monday’s hearing and listened through an interpreter.

Tamara Crepet, a federal public defender who initially represented Zhang, told the judge Zhang makes too much money to be represented by her office.

Prosecutors said Zhang admitted to the Federal Bureau of Investigation that he downloaded Apple driverless technology files to his wife’s laptop to have continued access to them.
Xmotors previously said it’s cooperating with authorities but that it found no indication Zhang ever communicated any sensitive information from Apple to his new employer. The company also said it has always strictly abided by the laws of China and the U.S. and takes protection of intellectual property rights seriously.

Prosecutor Matt Parrella told the judge Zhang faces a single count of trade-secret theft and faces as long as 10 years in prison and a $250,000 fine if convicted.

Apple’s self-driving car project is a rare initiative by the company that has played out in the public eye over the past few years. In 2015, Apple executives approved a plan to build a self-driving, electric vehicle to take on Tesla Inc. and the Detroit auto industry. Apple hired more than 1,000 engineers.

The case is U.S.A. v. Zhang, 18-cr-00312, U.S. District Court, Northern District of California (San Jose).

–With assistance from Mark Gurman.To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net Peter Blumberg, Joe Schneider

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