Chinese Government-Controlled Companies Charged with Stealing DuPont Trade Secrets
Monday, February 13, 2012
Federal officials based in San Francisco have indicted five companies controlled by the government of China, charging them with conspiracy to commit economic espionage, theft of trade secrets and attempted economic espionage.
The Chinese companies, known as the Pangang Group, are accused of trying to acquire industrial secrets belonging to DuPont through USA Performance Technology Inc. (USAPI), a company in Oakland. Specifically, the Pangang Group sought information on the manufacture of chloride-route titanium dioxide (TiO2).
TiO2, a pigment that makes things white, is used in products ranging from paints and plastics to toothpaste, sunscreen and cosmetics to the insides of Oreo cookies, the “M”s on M&M candies and the honey mustard sauce served at McDonald’s and Wendy’s. On food labels it often goes by the name “E171.” The chemical is a big moneymaker for DuPont, helping it bring in sales of about $2 billion a year.
The Justice Department also charged five individuals involved in the case. A married couple, Walter and Christina Liew, naturalized citizens of the United States, are the co-owners of USAPI. Americans Robert Maegerle and Tae Chao were longtime DuPont employees. Hou Shengdong, a Chinese citizen, was the vice director of the Chloride Process TiO2 Project Department for the Pangang Group Titanium Industry Company Ltd. A warrant has been issued for his arrest.
The indictment did not name Luo Gan, the high-ranking member of the Chinese Communist Party who, in a motion filed on February 2, was accused of ordering the Liews to obtain the details of the DuPont process.
-David Wallechinsky, Noel Brinkerhoff
To Learn More:
U.S. and Chinese Defendants Charged with Economic Espionage and Theft of Trade Secrets in Connection with Conspiracy to Sell Trade Secrets to Chinese Companies (U.S. Department of Justice)
China Tangled Up in Industrial Espionage (by Peter Lee, Asia Times)
China and Russia Lead in Stealing U.S. Economic Secrets (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Titanium Dioxide Report (Petrosil)
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