I-Team: Ex-Citadel employee admits stealing corporate secrets

CHICAGO (WLS) -- A former engineer at one of the world's largest hedge fund firms admitted to stealing corporate secrets and dumping the computer files in Wilmette Harbor when he was about to get caught.

The ABC7 I-Team has been looking into this case since 2011, when a computer whiz named Yihao Ben Pu was first charged with stealing company secrets from Citadel in Chicago, the mega hedge fund manager. Pu is a Cornell University graduate and was considered a rising star at Citadel. On Monday, he pleaded guilty to federal charges in the case and admitted that it wasn't the first time he stole from his employer.

Risk management is a service that Citadel touts to its hedge fund clients. In 2011, at the firm's Chicago headquarters, the risk was on the inside. Pu, then 24, was found to have been stealing the company's secret computer trading codes known as "alphas."

Pu and an alleged accomplice at the firm were charged in a multi-count federal indictment, and Monday, three years later, Pu's plea agreement was entered into the court docket.

The Cornell graduate admits that he built a pair of "virtual computers" to bypass the company's intricate security protocols. Pu says he downloaded thousands of files from the company to his personal storage devices.

Pu also admits having dumped some of the computer equipment he used into a sanitary canal near Wilmette Harbor, fearing the authorities were onto him.

FBI divers discovered computer hard drives in the water that contained Citadel's alpha codes, the building blocks of their billions in assets. Investigators believe Pu planned to use the secret codes to start his own hedge fund in China.

Citadel was his second job out of college. In the plea agreement, he admits having stolen trade secrets from his first, unidentified employer the day before he quit that job.

Pu's bio lists his first employer as Tradeworx in New Jersey. The I-Team was unable to reach anyone with that company.

Pu will be sentenced in early November. He could receive up to 10 years, but considering his lack of criminal history, it will likely be far less.