A federal grand jury in San Francisco has charged five individuals and five companies with economic espionage and theft of trade secrets for their roles in what prosecutors say is a long-running effort to obtain U.S. trade secrets for the benefit of companies controlled by the government of the People’s Republic of China (PRC).
According to the indictment just released, the communist government of the PRC identified as a “priority” the development of chloride-route titanium dioxide (TiO2) production capabilities. TiO2 is a commercially valuable white pigment with numerous uses, including coloring paint, plastics and paper.
To achieve that communist government goal, companies controlled by the PRC government, specifically the Pangang Group companies named in the indictment and employees of those companies allegedly conspired and attempted to illegally obtain TiO2 technology that had been developed over many years of research and development by E.I. du Pont de Nemours & Company (DuPont).
The Pangang Group companies were aided in their efforts by individuals in the United States who had obtained TiO2 trade secrets and were willing to sell those secrets for “significant sums” of money.
Defendants Walter Liew, Christina Liew, Robert Maegerle and Tze Chao obtained and possessed TiO2 trade secrets belonging to DuPont. Each of these individuals allegedly sold information containing DuPont TiO2 trade secrets to the Pangang Group companies for the purpose of helping those companies develop large-scale chloride route TiO2 production capability in the PRC, including a planned 100,000 ton TiO2 factory at Chongqing, PRC.
Also according to the indictment, the Liews, USA Performance Technology Inc. (USAPTI), and one of its predecessor companies, Performance Group, entered into contracts worth in excess of $20 million to convey TiO2 trade secret technology to Pangang Group companies. The Liews allegedly received millions of dollars of proceeds from these contracts. The proceeds were wired through the United States, Singapore and ultimately back into several bank accounts in the PRC in the names of relatives of Christina Liew.
