Intellectual Theft

The Great Brain Robbery


The Great Brain Robbery

Photo Illustration by 731

AkzoNobel
(Houston unit, Dutch paint company)
Qinggui Zeng, formulation chemist. Came from China on student visa in 1996, hired in 2005. Pleaded guilty in 2008 to stealing formula for an industrial epoxy-based, fireproof coating. Prosecutors said he was planning to return to China and had solicited investors for a Chinese venture to make and sell the coating as his own. Trade secrets found under insulation in attic space at his home. Sentenced May 16, 2008, to one year in prison, three years’ probation, deportation afterward.
 
Apple (AAPL)
Paul Shin Devine, Apple global supply manager from 2005 to 2010, sent drawings, pricing information, and projected sales figures on various Apple devices to suppliers in China, South Korea, Taiwan, and Singapore. Suppliers paid kickbacks, which Apple said totaled more than $1 million. Pleaded guilty 2011.
 
Boeing (BA)/Rockwell Intl.
Dongfan “Greg” Chung, first person tried under Economic Espionage Act of 1996. Chinese native, U.S. citizen, engineer. Worked from 1964 to 2002 mostly as stress analyst on fuselage of U.S. space shuttle, and from 2003 to 2006 as contractor investigating Columbia space shuttle crash. In 2006, FBI found 300,000 pages at his home, including technical info on space shuttle, Delta IV rocket, F-15 fighter, B-52 bomber, Chinook helicopter. Earlier case turned up letter to Chung from Chinese official thanking him for previous work and asking for info on shuttle. Arrested 2008; convicted 2009 of violating Economic Espionage Act and acting as foreign agent. Sentenced 2010 to 15 years and 8 months, followed by three years of supervised release.
 
CME Group (CME)
Chunlai Yang, Chinese national, came to U.S. for Ph.D., became senior software engineer at CME, operator of Chicago Mercantile Exchange. Indicted on charges he stole trade secrets from exchange from December 2010 to June 2011 to improve electronic trading in China. Accused of downloading thousands of files of source code and algorithms onto thumb drive while forming partnership with two others in China aimed at increasing trading volume for Zhangjiagang chemical electronic trading market, among others. Pleaded not guilty October.
 
Dow AgroSciences
Kexue Huang, Chinese national, Dow researcher, then biotechnologist at Cargill. From 2007 to 2010, stole trade secrets about pesticides from Dow and information about components for making new foods from Cargill for Chinese universities and foundation research. Pleaded guilty to violation of Economic Espionage Act; sentenced 2011 to seven years, three months. Pleaded guilty to trade secret theft.
 
Dow Chemical (DOW)
Wen Chyu Liu, aka David W. Liou, former research scientist, sentenced to five years for stealing trade secrets and marketing them to Chinese companies going back to 1996. Government said he paid Dow employees, current and former, for information. Worked in Plaquemine (La.) Dow Chemical facility for 27 years, from 1965 to 1992, with access to secrets of making chlorinated polyethylene (CPE) used in vinyl siding, electrical cable jackets, and industrial hoses. Convicted in Baton Rouge, La.; sentenced January 2012 to five years for conspiracy to steal trade secrets and perjury.
 
DuPont (DD)
USA Performance Technology President Walter Liew, his wife, Christina Liew, and two others—Robert Maegerle and Tze Chao—charged with conspiring to steal trade secrets about titanium dioxide technology from DuPont for Chinese companies, including Pangang Group, a codefendant and one of China’s largest titanium pigment producers. Titanium dioxide (TiO2) is pigment widely used in paint, plastics, paper. Prosecutors said Chinese government officials directed Liew in 1991 to obtain technology for pigment manufacturing factories. Liew has not yet entered plea, but in documents said he didn’t steal trade secrets. Maegerle and Christina Liew pleaded not guilty. Chao pleaded guilty March.
 
DuPont
Hong Meng, senior research chemist, Chinese national, Ph.D. from UCLA, 2002. Got job at DuPont in 2002 working on organic light-emitting diode technology used in display technology. Downloaded files to external drive after secretly taking a job at Peking University, which was working on same technology. Prosecution said he made presentation to Chinese officials about commercializing the research. Pleaded guilty in 2010 to one count, theft of trade secret. Sentenced October 2010 to 14 months.
 
EnfoTech
Yan “Wesley” Zhu, Chinese national, environmental engineer for EnfoTech, New Jersey company that develops environmental software for governments. Charged 2008 with transferring trade secrets regarding management of hazardous waste to his own company in China. Tried, convicted of wire fraud, acquitted April 2011 of stealing trade secrets. Sentenced January 2012 to three years’ probation.
 
Ford Motor (F)
Xiang Dong “Mike” Yu, product engineer, copied 4,000 documents, including design specs, before leaving Ford, where he worked from 1997 to 2007. Later worked for Beijing Automotive. Specs turned up on his Beijing Automotive laptop when confiscated at O’Hare International at his 2009 arrest as he was arriving from China. Pleaded guilty 2010 to theft of trade secrets; sentenced to nearly six years, $12,500 fine.
 
General Motors (GM)
Shanshan Du, engineer, and husband, Yu Qin, U.S. citizens, charged with stealing info about hybrid car technology for their own company to sell to Chinese carmaker, Chery Automotive. Worked at GM 2000-2005. Both have pleaded not guilty.
 
Goodyear Tire & Rubber (GT)
Clark Alan Roberts and Sean Edward Howley, both U.S. citizens and engineers at Tennessee’s Wyko Tire Technology, a Goodyear supplier, convicted 2010 of entering Goodyear plant in Kansas under false pretenses, photographing device used to wrap cable for tire’s inner thread, and transmitting photos for eventual use by Wyko contractor in China to build tiremaking equipment. Sentenced to probation 2011.
 
L-3 Communications (LLL)
Sixing Liu, aka Steve Liu, China native, senior staff engineer, for Space & Navigation, New Jersey-based division of L-3 Communications, 2009-2010. Arrested March 2011 on criminal complaint from U.S. District Court of New Jersey for exporting defense-related technical data without license. Helped work on precision navigation devices for Defense Department. Prosecutors say on return to Newark from Shanghai in November 2010, had computer with hundreds of docs about company projects—including sensitive proprietary info, some restricted for export—and images of him making presentation to tech conference sponsored by China, none of which had been authorized by company. Pleaded not guilty.
 
Motorola (MMI)
Hanjuan Jin, software engineer charged with economic espionage, or stealing trade secrets to benefit foreign government. Native Chinese, naturalized U.S. citizen. Stopped 2007 at O’Hare with 1,000 Motorola documents, $30,000, and one-way ticket to China. Among papers, confidential documents relating to Motorola’s “Push-to-Talk” mobile-phone technology. Jin worked for Motorola nine years and had link to Beijing technology company affiliated with military. Judge issued mixed verdict last month: guilty of stealing trade secrets for own benefit; not guilty of benefiting Chinese military.
 
Northrup Grumman (NOC)
Noshir S. Gowadia, engineer on B-2 stealth bomber, born in India, naturalized U.S. citizen, worked at Northrup as employee or contractor 18 years, 1968 to 1986, again as defense contractor through his own company. Charged with conspiring beginning around 2002 to sell secret military info to China, traveling there six times from July 2003 to June 2005 to make presentations to help China develop cruise missiles. Paid $110,000. Convicted, sentenced to 32 years January 2011. Appealing.
 
Power Paragon
Chi Mak, naturalized U.S. citizen, engineer for this defense contractor, convicted 2007 for exporting sensitive military technology to China, including U.S. Navy’s current and future warship technologies. Four family members, including wife, indicted with him and pleaded guilty after Mak found guilty at 2007 trial of attempting to violate export control laws and failing to register as foreign government agent. Chi Mak sentenced to 24½ years. China provided Chi Mak with “tasking lists,” including getting info on nuclear-powered submarines. Caught 2005 when CD-ROM containing info found in luggage of relatives trying to board flight to China at LAX. Four relatives and codefendants: Tai Wang Mak (10 years imprisonment for one count of conspiracy to export defense articles); Chi Mak’s wife, Rebecca Chiu (three years, prison); Yui “Billy” Mak (11 months, prison); Fuk Heung Li (three years, probation).
 
Quantum3D
Xiaodong Sheldon Meng, naturalized Canadian citizen born in China, systems and 3D graphics engineer, indicted 2006 for stealing military application trade secrets, including combat simulation software, using them in demos and sales proposals to China, Royal Malaysian Air Force, and Royal Thai Air Force. Programs gave precision training to fighter pilots in night vision scenarios, for example. Worked at San Jose-based Quantum3D 2000-2003 as employee, then consultant. Pleaded guilty 2007 to violating Economic Espionage Act of 1996 and Arms Export Control Act of 1976. Sentenced 2008 to two years.
 
Sanofi-Aventis (SNY)
Yuan Li, Chinese citizen, research scientist at company 2006-2011, charged with stealing trade secrets and making them available to rival in which she was partner, Abby PharmaTech, a U.S. subsidiary of Chinese chemical company, and making compounds available for sale on Abby’s website. Pleaded guilty January to trade secret theft.
 
SiRF Technology (CSR:LN)
Zhiqiang “Michael” Zhang, senior software engineer promoted to director of software development for SiRF, San Jose company that develops code for location-based services and apps for mobile phones and GPS. Worked there 2002-2009. Two other former SiRF engineers also charged. Accused of possessing SiRF’s trade secrets to benefit own startup company in China. Indicted November 2010. Pleaded not guilty.

Woolner is a former Bloomberg columnist and reporter, now a freelance writer in Savannah. She can be reached at awoolner@mindspring.com.
Fisk is a reporter for Bloomberg News in Detroit.
Gullo is a reporter for Bloomberg News in San Francisco.
Thomas is an intern for Bloomberg News in New York.

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