Skip to comments.Chinese National Charged with Economic Espionage Involving Theft of Trade Secrets...
Posted on 09/01/2010 2:02:34 AM PDT by Cindy
NOTE The following text is a quote:
Chinese National Charged with Economic Espionage Involving Theft of Trade Secrets from Leading Agricultural Company Based in Indianapolis
WASHINGTONKexue Huang, aka John, 45, has been arrested and charged in a 17-count indictment with economic espionage intended to benefit a foreign government and instrumentalities, and interstate and foreign transportation of stolen property, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Timothy M. Morrison for the Southern District of Indiana.
Huang was arrested on July 13, 2010, in Westborough, Massachusetts by FBI agents, and today made his initial appearance in U.S. District Court for the Southern District of Indiana. According to the indictment, Huang is a Chinese national who was granted legal permanent resident status in the United States. The indictment alleges that Huang, formerly of Carmel, Indiana, misappropriated and transported trade secrets and property to the Peoples Republic of China (PRC) while working as a research scientist at Dow AgroSciences LLC (Dow). While he was employed at Dow, he then directed university researchers in the PRC to further develop the Dow trade secrets. He also allegedly applied for and obtained grant funding that was used to develop the stolen trade secrets.
Economic espionage robs our businesses and inventors of hard-earned, protected research, and is particularly harmful when the theft of these ideas is meant to benefit a foreign government, said Assistant Attorney General Lanny A. Breuer of the Criminal Division. The protection of trade secrets and all intellectual property is vital to the economic success of our country, and our leadership in innovation. We will continue to bring charges under the Economic Espionage Act wherever supported by the evidence.
Complex cases like this one, where the challenge of highly technical evidence is compounded by geography, require extraordinary cooperation and flexibility between all components of the investigation, said U.S. Attorney Timothy M. Morrison. We had that here.
According to the indictment, Dow is a leading agricultural company that provides agrochemical and biotechnology products. Since approximately 1989, Dow has made substantial investments in research and development to produce a class of organic insect control and management products. A proprietary fermentation process has been used to develop these organic insecticides.
According to the indictment, Huang was employed as a Dow research scientist from early 2003 until Feb. 29, 2008. As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets, and prohibited him from disclosing any confidential information without Dows consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.
In December 2008, Huang allegedly published an article without Dows authorization through Hunan Normal University (HNU) in the PRC, which contained Dow trade secrets. The article allegedly was based on work supported by grants from the National Natural Science Foundation of China (NSFC), a foreign instrumentality of the PRC. Huang also allegedly directed individuals associated with HNU to conduct research at their laboratories on Dow trade secrets. The indictment also alleges that beginning in March 2008, after leaving Dow, Huang applied for and ultimately received grants from NSFC which he used to develop Dow trade secrets.
The indictment also alleges that beginning as early as September 2007, Huang directed research in the PRC on Dow confidential information, including trade secrets, which he was assigned to research in the course of his Dow employment. In addition, the indictment alleges that Huang sought information about manufacturing facilities in the PRC that would allow him and others to compete in the same market as Dow.
Huang faces a maximum of 15 years in prison and a $500,000 fine on each of the 12 counts of economic espionage. He faces 10 years in prison and a $250,000 fine on each of the five counts of transportation of stolen property.
The case is being prosecuted by Assistant U.S. Attorney Cynthia J. Ridgeway of the U.S. Attorneys Office for the Southern District of Indiana as well as Assistant U.S. Attorney Mark L. Krotoski and Trial Attorney Evan C. Williams of the Criminal Divisions Computer Crime and Intellectual Property Section (CCIPS). The National Security Division provided assistance in this matter. The investigation is being conducted by the FBI. Significant assistance in the case has also been provided by the CCIPS Cybercrime Lab.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty.
“Dow Agro scientist’s indictment unsealed
Charges allege former worker Huang shared trade secrets over 5 years with researchers in China”
By Jon Murray
Posted: September 1, 2010
SNIPPET: “Ridgeway said Huang’s team was making plans to acquire manufacturing facilities in China and already possessed bacterial strains needed for the insecticide. “He now has the full recipe,” she said, urging Foster to keep him in jail.
Daniel R. Kittle, global vice president of R&D for Dow AgroSciences, testified that the Indianapolis-based unit of Dow Chemical Co. spent more than $300 million to develop its organic insecticides over 20 years.”
SNIPPET: “Medernach said the Minneapolis FBI office is still investigating Huang’s activities concerning his work at Cargill, an agricultural products producer and marketer, for a brief period after he left Dow.”
Thousands and thousands like him all over the place.
And just look who’s sitting in science and engineering classes at all the top universities... more future high-tech spies trained right at home.
“Chinese National Charged with Economic Espionage Involving Theft of Trade Secrets from Leading Agricultural Company Based in Indianapolis”
This guy is not to bright. All he had to do was to contribute $10,000 to “elect Hillary campaign” and they would have gave him the information on a silver platter.
This is unbelievably common. Chinese nationalists are firmly entrenched in most Western companies, especially those with sensitive and classified operations. The number of those Chinese nationals who are associated with the Cinese military would shock the average American. In other words, they are legion. And most of them came here during the 1990s, when the Clinton Administration was gleefully selling secrets to the ChiComs and welcomed ChiCom inflitration of America with open arms. I wonder how many people know that there is only one foreign military facility in the United States, and that is a ChiCom operation in Long Beach, CA. Not even our closest allies are allowed a military presence here, but the ChiComs are.
“Chinese nationalists” should be “Chinese nationals.”
Yes, this is not the first such case. It was reported today that he pleaded guilty. I recall a Chinese graduate student killing one of our top scientists - seems it happened in Iowa, maybe in the early 1990s. It was a strange case. I read somewhere that foreign college students have higher rates of homicide than US students.
“Research scientist in Carmel pleads guilty to espionage
This is the first trade secret prosecution in Indiana under a provision of the Economic Espionage Act that prohibits trade secret theft intended to benefit a component of a foreign government.”
12:48 p.m. EDT, October 18, 2011
SNIPPET: “Kexue Huang, a Chinese national and a former resident of Carmel, Ind., pleaded guilty Tuesday to one count of economic espionage to benefit a foreign university tied to the Peoples Republic of China (PRC) and one count of theft of trade secrets.”
NOTE The following text is a quote:
Chinese National Pleads Guilty to Economic Espionage and Theft of Trade Secrets
First Prosecution in Indiana for Foreign Economic Espionage
U.S. Department of Justice
October 18, 2011
WASHINGTONKexue Huang, a Chinese national and a former resident of Carmel, Ind., pleaded guilty today to one count of economic espionage to benefit a foreign university tied to the Peoples Republic of China (PRC) and one count of theft of trade secrets.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General for National Security Lisa O. Monaco, U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana, U.S. Attorney B. Todd Jones of the District of Minnesota, and Robert J. Holley, Special Agent in Charge of the Indianapolis Field Office of the FBI.
This is the first trade secret prosecution in Indiana under a provision of the Economic Espionage Act that prohibits trade secret theft intended to benefit a component of a foreign government. Since its enactment in 1996, there have been a total of eight such cases charged nationwide under the Economic Espionage Act.
Huang, 48, pleaded guilty to the charges before U.S. District Judge William T. Lawrence in the Southern District of Indiana. In July 2010, Huang was charged in an indictment filed in the Southern District of Indiana for misappropriating and transporting trade secrets to the PRC while working as a research scientist at Dow AgroSciences LLC. Today, a separate indictment filed in the District of Minnesota was unsealed, charging Huang with stealing a trade secret from a second company, Cargill Inc.
According to court documents, from January 2003 until February 2008, Huang was employed as a research scientist at Dow, a leading international agricultural company based in Indianapolis that provides agrochemical and biotechnology products. In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.
As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets, and prohibited him from disclosing any confidential information without Dows consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.
Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets. According to plea documents, from 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and the PRC. With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities tied to the PRC. Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in the PRC, including identifying manufacturing facilities in the PRC that would allow him to compete directly with Dow in the established organic pesticide market.
According to court documents, after Huang left Dow, he was hired in March 2008 by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services. Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill. Huang admitted that during his employment with Cargill, he stole one of the companys trade secretsa key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in the PRC.
According to the plea agreement, the aggregated loss from Huangs criminal conduct exceeds $7 million but is less than $20 million.
Mr. Huang used his insider status at two of Americas largest agricultural companies to steal valuable trade secrets for use in his native China, said Assistant Attorney General Breuer. We cannot allow U.S. citizens or foreign nationals to hand sensitive business information over to competitors in other countries, and we will continue our vigorous criminal enforcement of economic espionage and trade secret laws. These crimes present a danger to the U.S. economy and jeopardize our nations leadership in innovation.
Todays plea underscores the continuing threat posed by the theft of business secrets for the benefit of China and other nations, said Lisa Monaco, Assistant Attorney General for National Security.
U.S. Attorney Hogsett noted that it is the first time economic espionage has been charged in the Southern District of Indiana. Hogsett remarked, As U.S. Attorney, I am committed to working with Hoosier businesses who have been victimized and doing everything within our influence to protect Hoosier companies. Hogsett praised Dow for its cooperation with the investigation and prosecution, noting that companies must first report and then work with federal investigators and prosecutors if we are to stem the illicit export of trade secrets vital to the economy not only of Indiana but the United States. Hogsett also stated, The dual prosecutions from Indiana and Minnesota should serve as a warning to anyone who is considering robbing American companies of their information and weaken the American economy by selling that information to foreign governments or others that he will face severe consequences. The federal agents and prosecutors who worked tirelessly in these two cases are to be commended for their hard work and dedication.
FBI Special Agent in Charge Holley stated, Among the various economic espionage and theft of trade secret cases that the FBI has investigated in Indiana, the vast majority involve an inside employee with legitimate access who is stealing in order to benefit another organization or country. This type of threat, which the FBI refers to as the insider threat, often causes the most damage. In order to maintain our competitive advantage in these sectors, industry must identify their most important equities, realize that they are a target, implement internal protection mechanisms to protect their intellectual property, and communicate issues of concern immediately to the FBI.
At sentencing, Huang faces a maximum prison sentence of 15 years on the economic espionage charge and 10 years on the theft of trade secrets charge.
The case is being prosecuted by Assistant U.S. Attorney Cynthia J. Ridgeway of the Southern District of Indiana, Trial Attorneys Mark L. Krotoski and Evan C. Williams of the Criminal Divisions Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jeffrey Paulsen of the District of Minnesota, with assistance from the National Security Divisions Counterespionage Section.