Defendant Kexue Huang pled guilty at an October plea hearing in a high-profile criminal trade secrets misappropriation case in the United States District Court for the Southern District of Indiana. Huang, a Canadian national permanently living in the United States, was charged with illegally exporting $300 million worth of trade secrets to China and Germany through an intermediary. Huang was sentenced to 7 years and 3 months in prison on December 21, 2011.
The case was particularly interesting because it dealt explicitly with the prong of the Economic Espionage Act that criminalizes stealing trade secrets for the benefit of a foreign government. This provision has been very seldom used since the law was passed in 1996, but its use in prosecutions is on the rise.
18 U.S.C. §1831(a) provides that individuals or organizations that, while “intending or knowing that the offense will benefit any foreign government,” steal, copy, or otherwise appropriate any trade secret or attempt to do so may be fined for up to $500,000, imprisoned for up to 15 years, or both.
The charges concerned trade secrets related to a commercial insecticide developed by Dow Chemical Co. in Indiana, where Huang worked from 2003 to 2008 until he was fired. In addition, some related to trade secrets owned by grain distributor Cargill, Inc., where Huang went to work as a biotechnologist in 2008. At the plea hearing, Huang admitted he stole a key component of a new Cargill food product and gave it to a student at Hunan Normal University in China.
Huang, while charged with 12 counts of economic espionage to benefit a foreign government or instrumentality and 5 counts of interstate or foreign transportation of stolen property, only pled guilty to one count of stealing trade secrets from Cargill and one count of engaging in economic espionage at Dow.