DOJ Wins Landmark Case Involving Trade Secrets Sent To China By Former DuPont Scientist
By: John A. Schwab
Yesterday, federal jurors in San Francisco convicted Walter Liew, a former engineer for DuPont Co., of 22 counts of economic espionage, trade secret theft, witness tampering, and false statements. U.S. officials are hailing this conviction as a landmark as it is the first federal jury conviction under the Economic Espionage Act of 1996. This case is part of a larger focus by DOJ and the Obama administration to crack down on the illegal transfer of U.S. data and technology to overseas corporations. Liew’s prosecution is one of 20 brought in recent years involving U.S. technology sent to China.
In a trial with over 30 witnesses and spanning 5 weeks, federal prosecutors alleged that Liew sold trade secrets related to a whitening chemical used in paper and plastic production to a state-owned Chinese company, Pangang Group Co. In addition to Liew, his company, USA Performance Technology, Inc. (“USAPTI”), was also convicted of similar charges related to economic espionage. Evidence admitted at trial showed that, beginning in the 1990s, Liew met with representatives from the Chinese government where he learned of China’s interest in the whitening chemical. Liew was already aware of DuPont’s research and development into the chemical and assembled former DuPont scientists to replicate DuPont’s work and convey it to manufacturers in China. Liew later executed contracts to provide technology associated with the chemical to state-owned entities netting over $20 million for Liew and USAPTI.
Liew’s wife, Christina Liew, a Chinese citizen, already faces similar charges including economic espionage, conspiracy to commit theft of trade secrets, and witness tampering. However, the charges against Mrs. Liew were severed from her husband’s case and she will be tried separately. Her trial date has not been set.
On the most serious count, Liew faces a maximum of 20 years imprisonment and a $500,000 fine. USAPTI is not facing a term of imprisonment but it could be sentenced to a fine of the greater of $10 million or twice the pecuniary gain to USAPTI or lost to DuPont. The superseding indictment that charged Liew, USAPTI, and co-conspirators can be found here.