Korean firm charged with stealing Kevlar secrets

[October 19, 2012]  ALEXANDRIA, Va. (AP) -- A South Korean company and five of its employees are accused in an indictment of stealing the recipe from the DuPont Co. to the high-tech fiber used to make Kevlar body armor, prosecutors announced Thursday.

The indictment in U.S. District Court in Richmond alleges that Kolon Industries engaged in a seven-year conspiracy to steal secrets on the manufacturing process for Kevlar and a similar product called Twaron produced by a large Japanese chemical company, Teijin Limited. The alleged corporate espionage attempts against Teijin were unsuccessful, prosecutors said.

Kolon would hire current and former DuPont employees as "consultants" who would provide confidential information about Kevlar, including its polymerization process and details of the manufacturing process, according to the indictment. Kevlar is made at a factory in Richmond, among other locations.

Kolon used those secrets to improve its process for making Heracron, a product that competes with Kevlar, according to the indictment.

Jeff Randall, a lawyer in the U.S. who represents Kolon, said the company disputes the allegations. He said Kolon is a well-respected company in Korea with thousands of employees and that the vast majority of the technical data at question in the case comes from expired and outdated DuPont patents and was legally available to Kolon.

Kevlar fiber is used not only in body armor but in fiber-optic cables, brake pads and a host of other industrial materials. Sales of Kevlar and a cousin material called Nomex generate about $1.5 billion annually for Wilmington, Del.-based DuPont.

U.S. Attorney for the Eastern District of Virginia Neil MacBride, whose office is prosecuting the case, called the indictment a "major case of industrial espionage" at a news conference in Alexandria.

Assistant Attorney General Lanny Breuer said he is optimistic that the defendants will either surrender voluntarily or that South Korea will extradite them to the U.S. to stand trial. MacBride said he believes all five continue to work for Kolon, which is headquartered in Seoul.

Several longtime DuPont employees are identified as unindicted co-conspirators in the indictment who received payments of up to $143,000 to engage in the scheme, according to court records. One of the former employees, Michael Mitchell, has already been sentenced to 18 months in prison for his role.

Last year in Richmond, a civil jury awarded DuPont a $920 million judgment against Kolon, which is appealing the verdict and also fighting an injunction that would bar it from producing the high-tech fibers, known as para-aramids, for 20 years.

In addition to the criminal charges against the company, five of its employees have also been charged: Jong-Hyun Choi, a vice president; In-Sik Han, a deputy vice president; Ju-Wan Kim, a business manager; Kyeong-Hwan Rho, who headed a technical team; and Young-Soo Seo, a business manager.

In a statement, DuPont Senior Vice President and General Counsel Thomas L. Sager thanked the Justice Department and FBI for investigating and said the company "will remain vigilant in protecting and enforcing our trade secrets."

[Associated Press; MATTHEW BARAKAT]

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