Chinese man gets prison for U.S. trade secrets theft

WASHINGTON Wed Dec 21, 2011 6:38pm EST

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WASHINGTON (Reuters) - A U.S. judge on Wednesday sentenced a Chinese-born scientist to 87 months in prison for stealing millions of dollars worth of trade secrets from two major American agribusiness companies and sending the data to China and Germany.

Kexue Huang, 46, worked at a Dow Chemical Co subsidiary from 2003 to 2008 in Indiana where he led a team of scientists developing organic insecticides and then later for another agribusiness giant, privately held Cargill Inc.

In October, he pleaded guilty in a federal court in Indiana to one count of stealing trade secrets from Cargill and one count of engaging in economic espionage at Dow AgroSciences, one of a handful of cases charged involving the U.S. Economic Espionage Act of 1996.

Theft of valuable trade secrets from American companies has become an increasing concern, U.S. officials have said, as countries like China can bypass spending millions of dollars and years of research and development as they compete for lucrative business.

"The theft of American trade secrets for the benefit of China and other nations poses a continuing threat to our economic and national security," Lisa Monaco, head of the Justice Department's national security division, said in a statement.

Prosecutors had sought 87 months imprisonment.

In a similar trade secrets theft case involving Ford Motor Co, a former product engineer who stole design documents and took them to China was sentenced to 70 months in prison earlier this year.

Cargill conservatively estimated at $12 million the research and development invested in the information stolen, according to court papers filed earlier this month. Huang admitted giving the information to someone at a Chinese university.

Cargill told the court that Huang worked on a project related to one of its "most significant R&D projects" to develop a new food product that has yet to be commercialized, spending tens of millions of dollars over many years.

The court filing gave no specific estimate for the loss by Dow beyond millions of dollars. The company said in a letter to the court that Huang was working on a family of crop protection products that have taken hundreds of millions of dollars to develop and two decades of research to create.

In his plea agreement, Huang admitted that, despite signing a confidentiality agreement, he passed numerous secrets about Dow's products to others doing research in Germany and China. He also acknowledged that he was trying to develop and produce the pesticides in China to compete against his former employer.

The case is USA v Kexue Huang, No. 10-cr-00102, in U.S. District Court for the Southern District of Indiana.

(Reporting By Jeremy Pelofsky; Editing by Phil Berlowitz)

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