Chinese scientist sentenced for economic espionage

U.S. district judge imposes stiff jail term for pesticide crime

By MATEUSZ PERKOWSKI

Capital Press

A Chinese scientist has been sentenced to more than seven years in prison for stealing trade secrets from U.S. agri-business companies.

Kexue Huang, a Chinese national and legal permanent resident of the U.S., previously pleaded guilty to turning over confidential information to the Chinese government.

Last year, the U.S. government indicted Huang on charges of economic espionage in a federal court in Indianapolis.

According to the indictment, Huang was hired by Dow Agrosciences to work on organic pesticides known as spinosyns, which are derived from soil bacteria that disrupt the central nervous system of insects.

Dow had been developing the pesticides since the late 1980s and hired Huang to help improve the products, the indictment said.

Despite signing a confidentiality agreement and undergoing security training, Huang unlawfully disclosed Dow's proprietary information between 2007 and 2010 by directing research on spinosyns at China's Hunan Normal University, the indictment said.

In August, Huang agreed to plead guilty to one count of theft of trade secrets to benefit a foreign government, punishable by up to 15 years in prison and a $500,000 fine. He also pleaded guilty to another count of theft of trade secrets, punishable by 10 years in prison and a $500,000 fine.

Huang obtained grant funding for his research from the National Natural Science Foundation of China, another "foreign instrumentality" of that country's government, according to the plea agreement.

The goal was to produce the spinosyn pesticides in China, with Huang "identifying manufacturing facilities" in that country to compete directly with Dow, the agreement said.

Huang "made statements on numerous occasions that referenced his desire to injure Dow AgroSciences by stealing proprietary and trade secret information," the plea agreement said.

After being hired by the Cargill agribusiness company in 2008, he also turned over trade secrets related to food manufacturing to a student at Hunan Normal University despite a confidentiality agreement, the document said.

The U.S. government urged U.S. District Judge William Lawrence to impose "a sentence at the high end of the stipulated guidelines range," based on the nature and financial damage of his crime.

Huang's conduct resulted in $7 million to $20 million in losses, according to the government.

Lawrence seems to have agreed with that view, sentencing Huang on Dec. 21 to prison for 87 months -- 7 years and three months -- as recommended by the government.