Alleged Chinese spy at Hydro-Québec formally charged, considered flight risk

LONGUEUIL, Que. — A former employee of Quebec's hydro utility made a first appearance in court Tuesday on charges that he fraudulently obtained a trade secret for the benefit of China, and he was ordered to remain detained ahead of a bail hearing.

Yuesheng Wang, 35, appeared in Quebec court in the Montreal suburb of Longueuil, Que., by videoconference and was assisted by a translator. Wang was detained at the RCMP's headquarters in Montreal.

The resident of Candiac, Que., on Montreal's South Shore, is the first person in Canada to be charged with economic espionage under the Security of Information Act. Wang was also formally charged on Tuesday with three violations of the Criminal Code: using a computer fraudulently and without authorization; obtaining a trade secret by deceit, falsehood or other fraudulent means; and breach of trust.

Federal prosecutor Marc Cigana objected to bail in Wang's case, telling the court the Crown fears that the suspect is a flight risk.

"It's our opinion that, after studying all the circumstances and the evidence, that Mr. Wang is a flight risk; in other words, it's a first ground objection for bail that he will not come back to court and face the proceedings," Cigana told reporters after the court hearing.

Wang is alleged to have committed the crimes between Jan. 1, 2018, and Aug. 22, 2022, in the course of his duties at Hydro-Québec, the provincially owned electricity utility. Three of the four charges each carry a maximum sentence of 10 years in prison. The breach of trust charge carries a maximum five-year sentence.

The RCMP alleges that Wang conducted research for Chinese research centres and a Chinese university and that he published scientific articles and filed patents with them rather than with the Quebec utility. Police also alleged he used information without his employer's consent, harming Hydro-Québec's intellectual property.

The RCMP said its national security enforcement team began an investigation in August after receiving a complaint from Hydro-Québec's corporate security branch.

Wang, who has a limited knowledge of English and does not speak French, shook his head as the charges were translated into Mandarin for him in court on Tuesday. He tried to have his bail hearing held immediately but was advised by his lawyer to delay. Quebec court Judge Anne-Marie Beauchemin ordered Wang remanded to a detention centre.

The case was put off until Friday, when more evidence will be disclosed and when the parties will discuss scheduling a bail hearing.

Neither lawyer could say following Tuesday's hearing whether Wang has Canadian citizenship.

Wesley Wark, an expert on national security and intelligence issues, said the Wang case isn't the first economic espionage incident in the country but is the first case that has led to charges under the 21-year-old Security of Information Act. Wark, a senior fellow at the think tank Centre for International Governance Innovation, said the case is "unusual."

"It … strikes me as a weird, potentially a bit of a kind of 'low hanging fruit' case as well, and by that I mean it doesn't directly involve a foreign state: there's the indication in the information sheet from the RCMP that Mr. Wang was acting to the benefit of the Chinese state, but he wasn't directly communicating with the Chinese state.

"It takes us into the world of university research and university publications and it's an important area to wade into, but also very complex in terms of being able to then reach back and pin an economic espionage charge against him."

The definition of "trade secret" is very broad, Wark said, which may make the case difficult to prove in court. He said the charges demonstrate that much of the espionage activity in Canada is occurring outside the orbit of the federal government and within the private sector.

Wang's lawyer, Gary Martin, told reporters outside the courtroom Tuesday that the charges against his client "are unprecedented."

"It's the first time we have somebody charged with that count in Canada, so we'll see what the court establishes, and also we have to look at the evidence that's tendered."

Quebec's hydro utility said Wang was a researcher who worked on battery materials with the Center of Excellence in Transportation Electrification and Energy Storage, known as CETEES. The centre develops technology for electric vehicles and for energy-storage systems.

In a statement, the utility said its security team launched a probe before it called federal authorities, adding that Wang has been fired. Wang, Hydro-Québec noted, didn't have access to the utility's "core mission," and it said his access was revoked when suspicions arose.

This report by The Canadian Press was first published Nov. 15, 2022.

Sidhartha Banerjee, The Canadian Press