KITCHENER — Two former employees of Waterloo's Teledyne Dalsa have been charged with stealing sensitive satellite imaging technology and selling it to a state-owned Chinese company, in violation of Canada's export laws.

The charges are the result of a two-year investigation by the RCMP's organized crime unit — dubbed Operation OSensor — which started after a complaint from the Waterloo company in early 2014.

That Kitchener-based probe crossed international borders, and involved the Canadian Space Agency, Canada Border Service Agency, Department of National Defense, Public Services and Procurement Canada, Global Affairs Canada, the U.S Department of Homeland Security and the FBI.

Two men, Arthur Pang, 46, and Binqiao Li, 59, are accused of exporting proprietary Dalsa technology to China, in violation of the Canadian Controlled Goods Program while they worked for the Waterloo company.

Both have been arrested and face a string of charges, including theft, fraud, conspiracy to commit fraud and possession of property obtained by crime. Pang is also accused of breaking Canada's export and customs laws.

Arrest warrants have also been issued for two other men, Britain's Nick Tasker — a Dalsa employee between 2002 and 2003, according to LinkedIn — and Hugh Ciao of California, who worked for one of the Chinese firms allegedly involved in the deal. They face several charges, including fraud over $5,000.

Li and Pang are accused of stealing Dalsa technology while they worked for the company and using it to outbid their former employer for a contract with the Beijing Institute of Space Mechanics and Electricity.

After Pang — who was arrested Friday when he landed at the airport in Montreal — left Dalsa, he started his own company, Global Precision Inc. Li, meanwhile, still worked for Dalsa when the charges were laid.

The Canadian-made technology was allegedly to be used in commercial Chinese satellites, according to Lisa Mathews, the federal prosecutor who is handling both men's bail hearings.

The alleged scheme is also a matter of national security, according to the RCMP.

Canada has a Controlled Goods Program that regulates the spread of "tactical and strategic assets including weapons, satellite global positioning systems and communications equipment, military equipment and related intellectual property."

"Canada has an international responsibility to safeguard its exports which potentially may be used against Canadians and their allies," Superintendent Jamie Jagoe, southwest district commander for the RCMP in Ontario, said in a statement.

"This investigation is an example of foreign governments having an interest in Canadian based controlled technology and it highlights the RCMP's commitment to keeping Canadian's safe from the potential misuse of that technology."

It's alleged the scheme started back in June 2011 and lasted until last summer, court heard Monday.

Li, a Chinese-born Canadian citizen who lives in Waterloo, was released on $500,000 bail yesterday from a Kitchener courtroom.

He wore a black winter coat, sweater and collared shirt, and relied on a Mandarin translator for the appearance. Li's wife appeared in court, and swore under oath that she'd report him if he broke any of the conditions of his bail.

His lawyer, Hal Mattson, said Li turned himself into the RCMP in Kitchener on Monday morning. Li, who was set free after handing in his passport and given strict limits on his movements, declined to comment outside of court.

Li is a former professor of electronic and information engineering at Tianjin University, and joined Dalsa's research staff in 1998, specializing in image sensors. Prior to that, he worked for Samsung, according to his online resume.

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The investigation began after the Waterloo company tipped off the authorities two years ago, the RCMP said. A federal agency forwarded Dalsa's complaint to the police, who received the company's full help.

"The company cooperated fully with our investigation," said Sgt. Penny Hermann of the RCMP.

Li continued to be employed by Dalsa for many months after the investigation began, court heard Monday. A spokesperson for Dalsa declined to comment on the criminal charges against its former employees.