July 10 (Bloomberg) -- Walter Liew, a California businessman who is the first person in the U.S. convicted by a jury of economic espionage, was sentenced to 15 years in prison for stealing DuPont Co. trade secrets to help a Chinese company build a manufacturing plant.
U.S. District Judge Jeffrey White in Oakland, California, issued the sentence today after prosecutors sought a prison term of at least 17 years. He said Liew’s conduct was “a virtual white-collar crime spree” and “a loud message has to go out” to those who would sell U.S. trade secrets.
Liew’s case is part of a government crackdown on theft of U.S. technology by China. In May, the Obama administration dramatically escalated the battle, charging five Chinese military officials with trade-secret theft through cyber-espionage, casting the hacker attacks as a direct economic threat.
Liew, a U.S. citizen born in Malaysia, “turned against his adopted country for greed,” White said at the end of a three-hour sentencing hearing.
Liew, a poor farmer’s son who made $28 million in consulting contracts with China’s Pangang Group Co., was convicted in March of 22 counts of economic espionage, trade secret theft, witness tampering and making false statements. White ordered Liew to forfeit $28 million and pay almost $512,000 in restitution and fined his company $19 million.
Liew apologized in court today and asked for leniency, telling White there were many things “I wish I would have done differently.”
“I regret my actions,” Liew said, his voice breaking during the two minutes he spoke to the judge. “I apologize to anyone who was hurt by my actions.”
Liew sold secrets to China’s Pangang Group, a Chengdu-based chemical company building a 100,000 metric-ton-per-year plant to produce titanium dioxide, a white pigment with global annual sales of $14 billion, prosecutors said. In developing plans for Pangang, he used five trade secrets, including a drawing of a plant system, an internal report about a computer model for a chemical process, a plant flow sheet and a basic data document containing the process and equipment needed to design a titanium dioxide production line, prosecutors said.
“It’s very important technology to us,” Michael Clarke. a DuPont attorney, said after the sentencing. Jobs at DuPont plants around the world “are a ticket to the middle class” for the company’s workers.
The Pangang plant hasn’t been completed, he said.
Stuart Gasner, Liew’s attorney, and Assistant U.S. Attorney John Hemann declined to comment after court.
While Pangang was charged, too, it didn’t face trial after prosecutors failed to properly serve legal documents on the company. Ex-DuPont engineer Robert Maegerle, 78, who prosecutors said helped obtain the trade secrets, was also convicted of economic espionage, trade secrets and witness tampering charges.
The case is U.S. v. Liew, 3:11-cr-00573, U.S. District Court, Northern District of California (San Francisco).
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