Two engineers indicted in economic espionage

SAN JOSE -- Two engineers about to go on trial on charges of stealing confidential computer chip designs from their Silicon Valley employer and a partner firm were indicted Wednesday on the rare and more serious charge of economic espionage, prosecutors said.

The indictment returned by a grand jury in U.S. District Court in San Jose accuses Lan Lee, 42, of Palo Alto, and Yuefei Ge, 34, a Chinese national living in San Jose, of orchestrating the computer chip plot so they could go into business with the Chinese military.

The men are accused of stealing secret data sheets and other confidential documents from NetLogic Microsystems of Mountain View, which designs processors for use in networking equipment such as Internet routers and switches, and Taiwan Semiconductor Manufacturing Co., a Taiwan-based company that operates chip-making factories and has offices around the world, including one in San Jose.

The indictment alleges that Lee and Ge formed a company called SICO Microsystems to develop chips based on the stolen designs. They allegedly reached out to Chinese government agencies for help funding the business, including a branch of the Chinese military responsible for the development of weapons systems, and an agency that funnels money toward technology companies with a military bent.

Lee and Ge were charged with five felony counts each, including two counts of economic espionage, two counts of theft of trade secrets and one count of conspiracy.

They remain free on $300,000 bond each and are scheduled to appear in court again Oct. 29 on the new charges.