UPDATE 2-California man gets 15 year sentence in China spying case

Thu Jul 10, 2014 6:20pm EDT

(Adds comments from parties and case background, paragraphs 3-10)

By Dan Levine

OAKLAND, Calif., July 10 (Reuters) - A California businessman was sentenced to 15 years in prison on Thursday for stealing DuPont trade secrets to help a state-owned Chinese company develop a white pigment used in a wide range of products.

A jury found Walter Liew guilty earlier this year on over 20 criminal counts, including conspiracy to commit economic espionage and trade secret theft. The government had requested a sentence between 17-1/2 years and nearly 22 years. Attorneys for Liew, 56, argued he should receive a maximum of eight years.

The United States has identified industrial spying as a significant and growing threat to the nation's prosperity. Prosecutors also charged Pangang Group, a steel manufacturer in Sichuan province, in the Liew case, but that indictment stalled after a U.S. judge ruled that prosecutors' attempts to notify the Chinese company of the charges were legally insufficient.

At Thursday's sentencing, U.S. District Judge Jeffrey White said Liew "turned against his adopted country for greed," adding that a "loud message" must be sent to those looking to steal from American companies.

An attorney for Liew, Stuart Gasner, declined to comment outside court. But during the hearing, he argued that Liew's sentence should be limited because the trade secrets at issue were not very valuable to DuPont.

Liew, in custody since the jury returned its verdict, was clad in a yellow prison jumpsuit at his sentencing and apologized for his actions for what a government lawyer said was the first time. "I feel terrible about it," Liew said.

At trial, U.S. prosecutors argued Liew met with Chinese officials who directed him to seek technologies that could help the country. He then paid former DuPont employees to reveal trade secrets to help Pangang Group develop a white pigment called chloride-route titanium dioxide, also known as TiO2, the government argued. The pigment is used to make a variety of white-tinted products, including paper, paint and plastics.

Outside court, DuPont attorney Michael Clarke told reporters the company operates TiO2 plants in several countries. "Theft of proprietary information puts those jobs at risk," he said.

Pangang paid Liew's company $28 million, according to prosecutors. White ordered that amount of money forfeited to the government, and fined Liew's company, an engineering consulting firm, about $19 million.

The judge acknowledged that Liew fought his way out of poverty and was a loving father. However, White said the businessman embarked on "a virtual white collar crime spree."

The case in U.S. District Court, Northern District of California is United States of America vs. Walter Liew et al., no. 11-cr-573. (Reporting by Dan Levine; Editing by Marguerita Choy and Tom Brown)

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