DuPont Trade Secret Theft Charges

Tuesday, February 14, 2012 @ 04:02 PM gHale

A Chinese business, one businessman and two former workers face charges they stole trade secrets from DuPont, according to a U.S. Justice Department indictment.

China’s Pangang Group Co., California businessman Walter Liew and two former DuPont Co. employees made a “long-running effort” to obtain U.S. trade secrets for Chinese companies, said U.S. Attorney Melinda Haag in San Francisco.

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China sought to develop a manufacturing process for developing chloride-route titanium oxide, a white pigment used in paint, plastics and paper, and state-owned Pangang conspired to steal the technology developed by DuPont, she said.

“The theft of America’s trade secrets for the benefit of China and other nations poses a substantial and continuing threat to our economic and national security,” said Lisa Monaco, assistant attorney general for national security.

Pangang runs the largest titanium complex in China and is one of the country’s largest titanium pigment producers, according to its website.

Liew, of Orinda, CA, and the other defendants sold information on DuPont’s trade secrets to Pangang so it could develop a large-scale titanium-oxide factory in Chongqing, China, Haag said.

The company began building the plant in 2010, with the first phase scheduled to start up at the end of this year, according to Pangang’s website.

Pangang faces charges in an indictment of conspiracy to commit economic espionage, attempted economic espionage and conspiracy to commit trade-secrets theft.

Also charged was Chinese national and Pangang executive Hou Shengdong, 42; former DuPont engineer Robert Maegerle, 76; and another former DuPont employee, Tze Chao, 77.

Police arrested Maegerle in Delaware and officials served Chao with a summons to appear in court March 1.

Liew faces charges of attempted economic espionage, according to a superseding indictment filed.

He previously faced charges of witness tampering and threatening a former employee to prevent the disclosure that he had hired two former DuPont workers to help design manufacturing facilities for customers in China.

The threat came just days after DuPont hit Liew and the employee with a civil suit accusing them of giving confidential information about the manufacturing process to competitors in China, according to a 2011 indictment. DuPont, based in Wilmington, DL and is the world’s largest manufacturer of titanium dioxide, reported the technology theft to the Federal Bureau of Investigation, leading to a investigation starting last March, prosecutors said.

Since then, the government has obtained documents that show Liew took direction from a Chinese government official to obtain technology needed to build the pigment manufacturing factories, according to a Jan. 31 court document.

A magistrate judge in San Francisco on Feb. 1 ordered Liew remain held after his lawyers sought his release.

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