Two Convicted in Trade Secrets Case

A former DuPont employee and another defendant were found guilty of conspiring to steal trade secrets for its chloride-route titanium dioxide production technology and sell them to the People's Republic of China, the Justice Department announced.

A case involving purloined trade secrets about E.I. du Pont de Nemours & Company's chloride-route titanium dioxide (TiO2) production technology has reached another stage, with a former employee, another defendant, and a company found guilty of economic espionage, theft of trade secrets, bankruptcy fraud, tax evasion, and obstruction of justice by a San Francisco federal court jury, the U.S. Department of Justice announced.

The individuals intended to sell the information for high sums to the People's Republic of China, U.S. Attorney Melinda Haag and her colleagues announced. The FBI and IRS were involved in the investigation.

The jury found that Walter Lian-Heen Liew (a/k/a Liu Yuanxuan); his company, USA Performance Technology Inc.; and Robert Maegerle conspired to steal trade secrets from DuPont. "The purpose of their conspiracy was to help those companies develop large-scale chloride-route titanium dioxide production capability in the PRC, including a planned 100,000-ton titanium dioxide factory in Chongqing. This case marks the first federal jury conviction on charges brought under the Economic Espionage Act of 1996," according to DOJ's news release.

"Fighting economic espionage and trade secret theft is one of the top priorities of this office, and we will aggressively pursue anyone, anywhere, who attempts to steal valuable information from the United States," Haag said. "As today's verdict demonstrates, foreign governments threaten our economic and national security by engaging in aggressive and determined efforts to steal U.S. intellectual property. I commend the efforts of the women and men of the FBI and the IRS in protecting America's businesses and our national security."

"This is a case about lying, cheating, and stealing," said José M. Martínez, Special Agent in Charge for the IRS Criminal Investigation. "The defendants stole secrets, lied to the bankruptcy court, and cheated the IRS and creditors. In today's economic environment, it's more important than ever that the American people feel confident that everyone is playing by the rules and paying their fair share."

The defendants were charged in February 2012. The trial lasted seven weeks. Liew, 56, of Walnut Creek, Calif., was convicted of conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, attempted economic espionage, attempted theft of trade secrets, possession of trade secrets, conveying trade secrets, conspiracy to obstruct justice, witness tampering, conspiracy to tamper with evidence, false statements, filing false tax returns, false statements in bankruptcy proceedings, and false oath in bankruptcy proceedings. His company was found guilty of conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, attempted economic espionage, attempted theft of trade secrets, possession of trade secrets, conveying trade secrets, and conspiracy to obstruct justice.

"Liew was aware that DuPont had developed industry-leading TiO2 technology over many years of research and development and assembled a team of former DuPont employees, including Robert Maegerle, to assist him in his efforts to convey DuPont's TiO2 technology to entities in the PRC," according to DOJ. "Liew executed contracts with state-owned entities of the PRC for chloride-route TiO2 projects that relied on the transfer of illegally obtained DuPont technology. Liew, Maegerle, and USAPTI obtained and sold DuPont's TiO2 trade secret to the Pangang Group companies for more than $20 million."

Maegerle, 78, was a DuPont engineer from 1956 to 1991, according to the agency.

Sentencing hearings for Liew, Maegerle, and USAPTI are scheduled for June 10 in Oakland, Calif. For more information about the case and the remaining defendants, visit this website.

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