Also in this week's C&EN, another employee going rogue and getting caught:
A federal grand jury has charged a former Chemours employee with stealing trade secrets related to sodium cyanide and trying to sell them to Chinese investors.
The indictment charges that marketing professional Jerry Jindong Xu, who worked for Chemours and its former parent DuPont between 2004 and 2016, intended to use the stolen information to convince Chinese investors to export sodium cyanide and later build a competing plant in North America.
Sodium cyanide is widely used to extract gold from ore. Demand for the potentially deadly chemical has been on the rise as consumption of the precious metal increases.
Earlier this year, Evonik Industries and Grupo Idesa opened a 40,000-metric-ton-per-year sodium cyanide facility in Mexico. Chemours announced plans for a $150 million plant in the Mexican state of Durango.
The indictment charges Xu with conspiracy to commit theft of trade secrets. If convicted, he faces 10 years in jail and a $250,000 fine. “We are committed to prosecuting anyone—be they rogue actors or foreign nations—who tries to line their pockets” by stealing trade information, says David Weiss, acting U.S. attorney for the District of Delaware. Xu’s lawyer tells C&EN he has no comment.
According to the indictment, Xu told one Chinese correspondent that he launched the sodium cyanide project as “a long-term investment for himself and not to slave away at this only to benefit someone else.”In the ol' Money Ideology Compromise Ego explanation for espionage, I've noted how often money is a primary explanation (although surely ego plays into it.)
The conspiracy charge here is quite flexible, because the prosecution does not have to prove that Mr. Xu stole trade secrets, they just have to show the intent and directing someone on his behalf, and then they can enumerate the potential damage this could have caused and call for the maximum sentence.
ReplyDeleteIf they had to prove the actual theft, they would have o argue every piece of information that Xu downloaded, whether it was a proprietary or it was already published in shareholders report or is accessible in open literature or from other source (i.e. pay per view market research done by other companies).
A conspiracy charge requires at least one conspirator, thats why the non-indicted conspirator is important. My guess is that the cyanide manufacturing expert is now a cooperating witness for the prosecution.
In a way, an employee trying to scoop his own employer, by using internal knowledge of the business, and getting himself into a conflict of interest situation, is pretty common. For example in the banking industry it happens all the time. Mr. Xu was quite blatant, he left a trail of evidence when he was promoting his business scheme. It is foolish to go against a company like DuPont, and try to start a competing business under your name. It would be far easier if he joined some company in China, in high-ranking position, and then used his knowledge discreetly to take away business from DuPont. Doing so, he would probably have to relocate to mainland China permanently, and give up the travel abroad.
By the way, there was a case of indian chemist working at CRO in Utah that did something pretty unethical - he was setting up a custom synthesis company with his brother in law, and he wanted to help them while keeping his current job, and he hoped to act as a sort of liaison for his indian friends. He was offering their services to his employer (it was a fiasco, his bosses were pissed and became very suspicious. He was eventually caught e-mailing a synthetic procedure to India, from the CRO database. Incidentally, it was for a sulfonated porphyrine the manufacture of which was highly lucrative for the CRO. At this point his employers had him arrested and had him to confess, and they decided to crucify him. They made at least four interviews in C&EN, they had him re-arrested and charged for theft. Eventually it was not possible to convince the court that the e-mailed procedure was proprietary, so the chemist was charged and took a guilty plea for a hacking statue offense - for accessing a passworded procedure database at his CRO without authorization. The government then tried to slap back the IP theft charges during the sentencing stage, based on the lower standard of preponderance of evidence (rather than beyond reasonable doubt), but the judge was going to have none of this and threw out the arguments, in view that the company officials were not testifying in good faith and were trying to make an example of their employee. He was sentenced to time served (3 days), was asked to pay restitution about $3000 to the company, and was asked to leave US.
ReplyDeletehttps://www.law360.com/articles/438394/ex-frontier-chemist-dodges-prison-for-disclosing-recipes