A former Chinese software engineer for IBM Corp Xu Jiaquiang was arrested on Tuesday in the US for allegedly stealing propriety source code from his former employer.

A criminal complaint has been filed against the 29-year-old in a federal court in White Plains, New York. Prosecutors accuse Xu of attempting to sell the stolen code to other companies and charged him with one count of theft of trade secret.

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According to authorities, he was recorded saying that he used the code to make software sell to customers after meeting with an undercover officer at a White Plains hotel. He was arrested Monday, reports Reuters.

"Theft of trade secrets of the type alleged against Xu drains the lifeblood of innovation and competition, and is rightly a serious federal crime," Manhattan U.S. Attorney Preet Bharara said in a statement.

Meanwhile, it has not been formally confirmed if IBM was named in the complaint. A background investigation on Xu revealed a LinkedIn profile that shows he was employed as a system software developer at IBM during the period in question. IBM has not confirmed anything as of this date.

The propriety source code that Xu is accused of stealing was linked to a proprietary software developed for a clustered file system that optimizes computer performance.

When Xu was working at IBM China in 2010, he had full access to that source code, according to the prosecutors. He later resigned in May 2014.

An undercover law enforcement officer disguised himself as an investor planning to put up his own data storage system. In March, Xu submitted to the officer and another undercover agent his resume and a sample code from his previous job.

In August, the FBI arranged for a computer network to be set up as Xu offered to remotely install the proprietary software. The uploaded files were functioning, the prosecutors said.

The case is U.S. v. Xu, U.S. District Court, Southern District of New York, No. 15-mj-4388.

TagsEx-IBM employee arrested, Former IBM employee arrested, Jiaquiang Xu, stealing propriety source code