Chinese Nat'l Pleads Guilty to Pesticide & Food Espionage, Dow/Cargill IP Thefts
The Justice Department has announced that Kexue Huang, a Chinese national, has pleaded guilty to one count of economic espionage to benefit a component of the Chinese government and one count of trade secrets theft, in violation of the Economic Espionage Act.
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(The Economic Espionage Act prohibits trade secret theft intended to benefit a component of a foreign government. Since its enactment in 1996, there have been a total of eight such cases charged nationwide under this act.)
Worked for Dow AgroSciences, Signed Confidential Info Disclosure Agreement
According to court documents, from January 2003 until February 2008, Huang was employed as a research scientist at Dow AgroSciences LLC, a leading international agricultural company that provides agrochemical and biotechnology products. In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.
As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets, and prohibited him from disclosing any confidential information without Dow’s consent.
Stole Dow Trade Secrets to Compete w/ Dow in Organic Pesticide Market in China
Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets. According to plea documents, from 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and China. With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities that were instrumentalities of the Chinese government. Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in China, including identifying manufacturing facilities in China that would allow him to compete directly with Dow in the established organic pesticide market.
Also Stole Stoke Key Secret in Manufacture of New Food Product from Cargill Inc.
According to court documents, after Huang left Dow, he was hired in March 2008 by Cargill Inc., an international producer and marketer of food, agricultural, financial and industrial products and services. Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill.
Huang admitted that during his employment with Cargill, he stole one of the company’s trade secrets -- a key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in China.
Aggregated Loss from Huang's Conduct Between $7- $20M
According to the plea agreement, the aggregated loss from Huang’s criminal conduct exceeds $7 million but is less than $20 million.
Faces Combined Max Prison Sentence of 25 Years at Sentencing
At sentencing, Huang faces a maximum prison sentence of 15 years on the economic espionage charge and 10 years on the theft of trade secrets charge.