A handful of HTC’s employees have been arrested on charges of fraudulent activities and stealing trade secrets of the company.

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Recently, several employees of the Taiwanese manufacturer have been arrested in Taipei for committing fraudulent expenses as well as for stealing trade secrets before leaving the company to start their own design firm in China. The employees include VP of Product Design Thomas Chein, Research and Development director Wu Chien Hung and senior design team manager Justin Huang. If you don’t know, Justin Huang is the same guy who sketched the design of HTC’s current flagship devices, HTC One.

The report against the employees was filed by HTC’s chairwoman Cher Wang to Taiwan’s Investigation Bureau.  The bureau later found that the three suspects were planning to launch their own design firm in China under the name “Xiaoyu” that aims to target the mainland Chinese markets. The employees were planning to resign from their jobs after claiming their mid-year bonuses this week.

The complaint filed also alleges the three suspects for making false commission claims for HTC One’s aluminum design and contracted an external firm to invoice HTC for a whopping $334,000 for the design that was created in-house.  The money was collected between the month of May and June this year and was split between the trios.

Interestingly, Chein was also caught downloading secret trade files from company’s servers including the files related to the design of the upcoming HTC Sense 6.0 UI, and distributing them to external contacts via email. It seems that there is not only one charge but a list of charges. If proven guilty, the trio will face the most difficult times in their careers.

When asked for comment from the Taiwanese manufacturer by the folks at Engadget, they said,

The company expects employees to observe and practice the highest levels of integrity and ethics. Protecting the company’s proprietary and intellectual properties, privacy and security is a core fundamental responsibility of every employee. The company does not condone any violation. As this matter is currently under investigation by the relevant authorities, we therefore refrain from further comments.

Now, this seems like a big problem just before one of the biggest gadget shows of the year – IFA 2013. The company is expected to launch its highly rumored HTC One Max which might feature the alleged HTC Sense 6.0 UI. However, there is no official word from the company about the launch until now.

Let’s just hope that this issue won’t affect the future plans of the firm or its upcoming products. Though, it might be a time consuming task for the firm to replace its design talent.

SourceEngadget