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 In a San Francisco federal court, a jury found Walter Liew guilty on
over 20 criminal counts including conspiracy to commit economic
espionage and trade secret theft. It also convicted another
defendant, former DuPont engineer Robert Maegerle, on multiple
counts as well.
U.S. prosecutors contended Liew paid former DuPont employees like
Maegerle to reveal trade secrets that would help the Chinese
company, Pangang Group, develop a white pigment called
chloride-route titanium dioxide, also known as TiO2. The pigment is
used to make a variety of white-tinted products, including paper,
paint and plastics.
Liew was ordered into custody after the verdict. In a statement, his
attorney Stuart Gasner said they were "very disappointed" in the
result.
"Walter Liew is a good man in whom we believe and for whom we will
continue to fight," Gasner said.
An attorney for Maegerle could not be reached for comment.
Defense attorneys argued Liew never intended to benefit the Chinese
government, and that the DuPont materials Liew and Maegerle handled
were not trade secrets.
The United States has identified industrial spying as a significant
and growing threat. DuPont is the world's largest producer of TiO2.
Prosecutors also charged Pangang Group <000629.SZ>, a steel
manufacturer in Sichuan province, in the case, but that indictment
stalled after a U.S. judge ruled that prosecutors' attempts to
notify Pangang of the charges were legally insufficient.
U.S. Attorney Melinda Haag in San Francisco said fighting economic
espionage is a top priority.
"We will aggressively pursue anyone, anywhere who attempts to steal
valuable information from the United States," she said in a
statement.
DuPont had filed a civil lawsuit against Liew in 2011 and alerted
the FBI, which launched the criminal case. During trial, Liew's
attorney called the relationship between DuPont and the government
an "unholy alliance."
Federal prosecutors, meanwhile, countered Liew attended a banquet in
1991 with a number of Chinese officials. In court filings,
prosecutors say the banquet was hosted by Luo Gan, who at the time
was a high-ranking official of the Communist Party of China Central
Committee. Luo Gan went on to become a member of the nine-member
Standing Committee of the Politburo, prosecutors wrote in a court
filing.
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'PUFFERY'
Liew described the meeting in a draft letter that U.S. federal
officials say they seized from his safety deposit box and presented
to the jury.
"The purpose of the banquet is to thank me for being a patriotic
overseas Chinese who has made contributions to China," Liew wrote in
a memo to a Chinese company, according to U.S. prosecutors, "and who
has provided key technologies with national defense applications, in
paint/coating and microwave communications."
Luo Gan gave Liew directives at the meeting, and two days later Liew
received a list of "key task projects," including TiO2, prosecutors
said. Pangang ultimately paid Liew's company $28 million.
Liew's attorney told jurors the letter was merely "puffery" on the
part of his client.
Sentencing for Liew and Maegerle is scheduled for June.
The case in U.S. District Court, Northern District of California is
United States of America vs. Walter Liew et al., no. 11-cr-573.
(Reporting by Dan Levine; editing by
Meredith Mazzilli and Cynthia Osterman)
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