By Dan Levine and James Kelleher
SAN FRANCISCO/CHICAGO Feb 8 U.S. prosecutors
expanded a criminal case over the alleged theft of industrial
secrets from chemical giant DuPont, securing an
indictment against a Chinese company on economic
A Northern California grand jury indicted Pangang Group for
conspiracy to commit economic espionage and other charges
including conspiracy to steal trade secrets, according to court
documents unsealed on Wednesday.
Pangang, a state-owned steel manufacturer in
Sichuan province, allegedly worked with a California businessman
and others to obtain several valuable trade secrets from DuPont,
the indictment says.
Separately, a former engineer for Motorola Inc was found
guilty on Wednesday of stealing trade secrets from the company
but cleared of economic espionage for China.
The latest developments in the two cases come as Chinese Vice
President Xi Jinping is scheduled to visit the United States
next week on a range of economic, trade, regional and global
Xi, considered China's president-in-waiting, will meet
President Barack Obama at the White House next Tuesday. The U.S.
visit will be a major step in signalling Xi's readiness to take
over as China's next top leader and run Beijing's complex and
sometimes vexed relationship with Washington.
The United States has identified industrial spying as a
significant and growing threat to the nation's prosperity. In a
government report released last November, authorities cited
China as "the world's most active and persistent perpetrators of
California businessman Walter Liew has already been in
custody for several months on witness tampering charges related
to the DuPont allegations. Liew and his wife, Christina, also
face charges of conspiracy to commit economic espionage and
other counts in the latest indictment.
Lawyers for Walter and Christina Liew could not be reached
for comment. Tom Nolan, a lawyer for Walter Liew, has previously
maintained that his client only possessed publicly available
information, not trade secrets from DuPont. [ID:nL2E8D1CHZ
The Pangang Group, named in the Dupont case, is based
in Panzhihua city in the far south of China's Sichuan province
and is western China's largest steelmaker. It was formally known
as Panzhihua Iron and Steel (Group) Co Ltd.
Three of Pangang's subsidiaries are also named in the
indictment, along with a Chinese citizen who worked for that
In 2010 authorities Pangang's merger with Angang Steel
Co Ltd, which would make Angang the country's
largest steel mill.
Phone calls to Pangang's headquarters on Thursday went
unanswered, and company officials did not respond to faxed
Liew, a U.S. citizen, allegedly paid former DuPont engineers
for assistance in designing chloride-route titanium dioxide,
also known as TiO2, according to the indictment. DuPont is the
world's largest producer of the white pigment used to make a
range of white-tinted products, including paper, paint and
Two former DuPont engineers were also indicted on Wednesday.
DuPont general counsel Thomas Sager said the company is
disappointed that former DuPont employees allegedly stole
technology. The company filed a civil suit against Liew and
referred the theft to law enforcement, Sager said.
Separately, former Motorola employee Hanjuan Jin has been
charged with illegally possessing thousands of the firm's trade
secrets on her computer and in other forms of digital storage,
and prosecutors said she intended to pass the information to the
Jin was found guilty by a Chicago federal judge on three
counts of theft of trade secrets after a bench trial, and faces
a maximum penalty of 10 years in prison on each count.
However, California businessman Liew's continued detention
has angered one Chinese-American advocate. Ling-Chi Wang, a
professor at the University of California, said spying between
countries and companies is a regular occurrence, and law
enforcement should have allowed DuPont's civil suit to develop
before arresting Liew.
Chinese targets might be more attractive in an election year,
Wang said, due to concerns about being called soft on China.
"I just find that to be very, very troublesome," said Wang,
who has previously spoken out against espionage-related
prosecutions of ethnic Chinese scientists.
In a statement on Wednesday, San Francisco U.S. Attorney
Melinda Haag said authorities will "aggressively pursue anyone,
anywhere" who tries to steal from the United States.
Prosecutors detailed Liew's alleged links with the Chinese
government in a court filing last week. They named, as one of
the Chinese representatives who once met with him, a
high-ranking Communist Party official who later became a member
of the Politburo.
In another development, Timothy Spitler, a former DuPont
employee who consulted for Liew, took his own life last week,
say multiple people familiar with the situation. Spitler
supplied material information to prosecutors in the
investigation, these people say. A lawyer for Spitler did not
respond to inquiries on Wednesday.
The case is United States of America vs. Walter Liew,
Christina Liew et al., U.S. District Court, Northern District of
California, No. 11-cr-573.