Alleged Dupont trade secret spies charged in California court

Five people and five companies were indicted in San Francisco on charges of stealing DuPont trade secrets for the Chinese government. Government prosecutors argued the five are international spies who stole chemical manufacturing trade secrets.

U.S. Department of Justice prosecutors say the accused individuals sold what they knew about the production of DuPont-owned chloride-route titanium dioxide to companies under the control of the People’s Republic of China.

The indictment claims China wanted to know how the DuPont chemical — common in paper, paint and plastics — was developed and made. U.S. investigators say the Chinese government wanted to duplicate the chemical process cheaply to tap into the $12 billion titanium dioxide world market.

The Justice Department and FBI allege the defendants were found in possession of the valuable DuPont trade secrets. The indictment included copies of multi-million dollar contracts reportedly hammered out between the defendants and the Chinese companies. The law enforcement reportedly traced a money trail from the United States to Chinese bank accounts set up in the names of relatives of one of the accused.

DuPont apparently discovered a flaw in its trade secrets’ security and informed the FBI. A follow-up investigation within the last year led to the intellectual property theft and espionage charges.

The accused trade secret spies face up to 20 years in prison and fines of as much as $10 million for every charge against them, if convicted.

A government official told the court that competitors who stole U.S. research and information would be vigorously prosecuted to stop damage to America’s economic climate and national security. The case could also spark civil litigation over intellectual property issues.

Source: ABC News, “Chinese Espionage Alleged to Target DuPont,” Jack Cloherty, Pierre Thomas and Jason Ryan, Feb. 8, 2012