A California engineer has been found guilty of stealing DuPont's recipe for producing white pigment and selling it to a state-owned Chinese company. As Bloomberg News reports, a federal jury in San Francisco this week found consultant Martin Liew guilty of 22 counts of economic espionage, trade-secret theft, witness tampering, and making false statements. Liew, 56, was found guilty of selling the secrets to Pangang Group, a China-based company that is building a new plant to produce titanium dioxide — a white pigment used in a wide range of products, including paper, whitening chemicals, and Oreo filling.
Former DuPont engineer Robert Maegerle was also convicted Wednesday on similar charges, with prosecutors saying he helped obtain the Delaware-based company's secrets. Each man could now face at least 15 years in prison and hundreds of thousands of dollars in fines, in what prosecutors said is the first federal jury conviction under the Economic Espionage Act of 1996. The US Justice Department has sought to crack down on China-related espionage cases in recent years, with the Obama administration claiming that Chinese spy agencies are targeting American telecommunication and technology industries.
"aggressive and determined efforts to steal U.S. intellectual property."
"As today’s verdict demonstrates, foreign governments threaten our economic and national security by engaging in aggressive and determined efforts to steal US intellectual property," US attorney Melinda Haag said in a statement.
Federal prosecutors say Liew and his wife set up a company in the 1990s with the explicit intent of selling DuPont's pigment recipe to Chinese industries. Since then, he has received more than $20 million from Pangang, prosecutors said, while court documents showed that Chinese government leaders have urged industries to duplicate or obtain DuPont's titanium dioxide recipe. According to the Associated Press, DuPont commands around 20 percent of the market for titanium dioxide, which sees about $17 billion a year in global sales.
The defense had denied that Liew stole the secrets, arguing that he used publicly available information and obtained patents to create his own recipe. US District Judge Jeffrey White ordered that the defendant be taken into custody yesterday, after noting that millions of dollars he received from the Chinese government were unaccounted for. Liew's attorney, Stewart Gasner, said he was disappointed in the verdict, and that his client would appeal.
"We are very disappointed," Gasner said in a statement. "Walter Liew is a good man in whom we believe and for whom we will continue to fight."