Don’t Do the Crime If You Can’t Do The Time: Top 10 Criminal Trade Secret Sentences

http://blogs.orrick.com/trade-secrets-watch/files/2013/09/shutterstock_121964782-Reduced-Size-100x80.jpgTrade secret theft can expose defendants not only to multi-million dollar civil verdicts but also to multi-year prison sentences. Trade Secrets Watch reviewed federal criminal trade secrets sentences since the Economic Espionage Act came into existence in 1996 and identified the Top 10 longest prison sentences on record. We also reviewed convictions under the Computer Fraud and Abuse Act for cases involving theft of trade secrets, but none made the list.

While we still sometimes see judges giving a slap on the wrist for intellectual property theft, the courts below doled out some serious prison sentences and steep fines. And with parole being abolished in the federal system, these defendants are looking at some real time:

Rank Case Prison Fine / Restitution Secrets Crime
#1 U.S. v. Dongfan “Greg” Chung (C.D. Cal. 2010) 15 years,
8 months
  Boeing trade secrets relating to the Space Shuttle program, Delta IV rocket, and military and civilian aircraft. Convicted after bench trial of 1 count of conspiracy to commit economic espionage, 6 counts of economic esponage to benefit a foreign country (China), 1 count of acting as an unregistered foreign agent, 1 count of making false statements to federal agents. (The White House mentioned this conviction in its Administration Strategy on Mitigating the Theft of U.S. Trade Secrets.)
#2 U.S. v. Nasser Ahmed Ameri (E.D. Ark. 2004) 8 years $1,405,694 restitution Arkansas Department of Motor Vehicles document production software Convicted after jury trial of 18 counts for stealing software to produce false ID documents, including production and possession of fraudulent documents, possession of document-making implements, Social Security fraud, theft of trade secrets (software), computer fraud, identity theft, possession of ammunition by an illegal alien, and making false statements.
#3 U.S. v. Joya Williams (N.D. Ga. 2007) Williams:
8 years;


Dimson:
5 years
Williams:
$40,000 restitution

 
Dimson:
$40,000 restitution
Coca-Cola confidential documents and new product samples Convicted following jury trial of conspiracy to commit theft of trade secrets; co-defendant Ibrahim Dimson pled guilty to same charge.
#4 U.S. v. Kexue Huang (S.D. Ind., D. Minn. 2011) 7 years,
3 months
  Dow Agrosciences and Cargill Inc. trade secrets relating to insecticides Pled guilty to misappropriating and transporting trade secrets with the intent to benefit China. Pled guilty to cases in two different district courts.
#5 U.S. v. Steven Hallstead and Brian Pringle (E.D. Tex. 1998) Hallstead:
6 years,
5 months

 
Pringle:
5 years
Hallstead:
$10,000 restitution
 
Pringle:
$50,000 restitution
Intel Corporation prototype computers Hallstead and Pringle both pled guilty to conspiracy to commit theft of trade secrets.
#6 U.S. v. Sixing Liu a/k/a Steve Liu (D.N.J. 2013) 5 years,
10 months
$15,000 fine L-3 Communications, Space and Navigation Division trade secrets detailing performance and design of guidance systems for missiles, rockets, target locators, and unmanned aerial vehicles (secrets valued in the hundreds of millions of dollars) Convicted following jury trial of 6 counts of violating Arms Export Control Act and the International Traffic in Arms Regulations, 1 count of possessing stolen trade secrets, 1 count of transporting stolen property in interstate commerce, and 1 count of lying to federal agents.
#7 U.S. v. Yu Xiang Dong a/k/a Mike Yu (E.D. Mich. 2011) 5 years,
10 months
$12,500 fine Ford Moto Co. automobile system design specifications valued in the millions of dollars Pled guilty to 2 counts of theft of trade secrets from Ford Motor Company. (The White House mentioned this conviction in its Administration Strategy on Mitigating the Theft of U.S. Trade Secrets.)
#8 U.S. v. Wen Chyu Liu a/k/a David W. Liou (M.D. La. 2012) 5 years $600,000 restitution,
$25,000 fine
Dow Chemical Co. trade secrets relating to chemical manufacture of an elastomeric polymer, chlorinated polyethylene used in automotive and industrial hoses, electrical cable jackets and vinyl siding Convicted following jury trial of 1 count of perjury and 1 count of conspiracy to commit trade secret theft. (The White House mentioned this conviction in its Administration Strategy on Mitigating the Theft of U.S. Trade Secrets.)
#9 U.S. v. Jack Shearer (N.D. Tex. 2000) Shearer:
4 years,
6 months

 
Humes:
2 years,
3 months

 
Nafus:
1 year,
9 months
Shearer:
$7,655,155 restitution
 
Humes:
$3.8 million restitution
 
Nafus:
$3.8 million restitution
Caterpillar, Inc. subsidiary Solar Turbines Inc. drawings, plans, schematics and specifications used to make parts for oil field and pipeline machinery Shearer and co-defendant William R. Humes both pled guilty to conspiracy to steal trade secrets; co-defendant Jack E. Nafus pled guilty to theft of trade secrets.
#10 U.S. v. Mayra Justine Trujillo-Cohen (S.D. Tex. 1998) 4 years $337,000 restitution Deloitte & Touche proprietary software

Pled guilty to wire fraud and theft of trade secrets.

 

 

Topics:  CFAA, Criminal Prosecution, Economic Espionage Act, Sentencing, Theft, Trade Secrets

Published In: Criminal Law Updates, Intellectual Property Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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