If You Have Been Accused of Corporate Espionage Don’t Hesitate, Call Us Today.
Defending against false claims of corporate espionage is our specialty. Our team of expert attorneys has countless hours of experience fighting for clients just like you. We defend clients from accusations such as: physically or electronically accessing corporate files without permission, posing as a corporate employee to learn confidential information, wiretapping, hacking, and the use of malware. We stand ready to battle on your behalf.
The penalties for corporate espionage can be extremely harsh. Contact us today and get an experienced corporate espionage attorney on your side.
Is it Corporate Espionage?
In order to be convicted of corporate espionage, you must, intentionally or knowingly, obtain a trade secret for the benefit of a foreign agent. This fraudulent obtainment may be made in person or via electronic means. It is also considered corporate espionage if an individual knowingly receives, buys, or even copies a stolen trade secret.
Both individuals and organizations can be charged with and convicted of corporate espionage. Corporate espionage may also be referred to as industrial espionage, economic espionage, or corporate spying.
As globalization continues to expand its reach in the business sphere, fears of corporate espionage will likely increase, as will the number of accusations.
The Economic Espionage Act – 18 U.S.C. § 1831
The Economic Espionage Act of 1996 outlines the elements of the crime of economic (corporate) espionage.
In order to be convicted of economic espionage, the government must prove that you:
- Obtained, received, purchased, copied or possessed, without proper authorization
- Trade secrets belonging to an organization; and
- That the purpose of this theft of trade secrets was to benefit a foreign government, agent, or instrumentality
An individual convicted of violating 18 U.S.C. § 1831 shall be imprisoned for a period not to exceed fifteen years, fined up to five million dollars, or both. Furthermore, any organization can be fined up to three times the value of the trade secrets stolen, not to exceed ten million dollars. With such serious consequences, it is vital that you retain an experienced health care fraud attorney as soon as possible.
Agencies Investigating Health Care Fraud
A host of federal agencies are tasked with investigating and prosecuting corporate espionage, including, but not limited to:
- The Federal Bureau of Investigation (FBI)
- The Department of Homeland Security (DHS)
- The Department of Justice (DOJ)
Each of these agencies has various departments, divisions, and special agents working in tandem to prosecute corporate espionage crimes. With so many differences experienced government officials working against you, don’t you need an experienced professional on your side?
How Do I Defend Myself Against An Accusation Of Health Care Fraud?
There can be many defenses to charges of corporate espionage. A defendant may claim that the information was not obtained without consent. Furthermore, a defendant may claim that the information was not proprietary, and therefore, not a trade secret. A defendant may also claim to have no knowledge that the information obtained would be used to benefit a foreign government, instrumentality, or agent.
Lack of knowledge can also be a defense against purchasing, copying, transferring, or possessing illegally obtained trade secrets.
Recent Corporate Espionage Cases in the News
PRC State-Owned Company, Taiwan Company, and Three Individuals Charged With Economic Espionage (2018)
An enterprise owned by the People’s Republic of China (United Microelectronics Corporation), a Taiwan company (Fujian Jinhua Integrated Circuit, Co., Ltd.), and three individuals (Taiwan nationals Chen Zhengkun, He Jianting, and Wang Yungming) were charged with a conspiracy to illegally obtain, convey, and possess trade secrets from an American based semiconductor company, Micron. The indictment was filed on September 27, 2018, and a civil suit was filed against the defendants on November 1, 2018.
The defendants were allegedly attempting to steal trade secrets from Micron (Micron is the only United States manufacturer of DRAM), specifically secrets related to dynamic random-access memory (DRAM). Chen was the GM and Chairman of an organization that Micron acquired, and later became president of a Micron subsidiary, which manufactured some DRAM chips. Subsequently, Chen resigned from the subsidiary and nearly immediately gained employment with United Microelectronics Corporation (UMC), Chen then proceeded to enter into an agreement with his former employer to mass-produce and jointly share DRAM technology while at UMC Chen enlisted many employees from his former company, including Ho and Wang, to leave and join UMC. He convinced Ho and Wang to take various trade secrets with them to their new employer.
If convicted, defendants face up to fifteen years imprisonment and a five million dollar fine for an economic espionage count, and up to ten-year imprisonment for theft of trade secrets. Furthermore, each company faces forfeiture and a fine not to exceed twenty billion dollars.
Chinese Intelligence Officer Charged with Economic Espionage Involving Theft of Trade Secrets from Leading U.S. Aviation Companies (2018)
Yanjun Xu was arrested and charged with conspiring and attempting to commit economic espionage and steal trade secrets. Xu, an operative of the Chinese Ministry of State Security (MSS), targeted aviation and aerospace organizations within the United States.
According to Assistant Attorney General for National Security John C. Demers, this case is not an isolated one, but an overall economic policy undertaken by the People’s Republic of China. In an unprecedented event, Xu was arrested in Belgium on April 1st and extradited to the United States. Xu faces four total counts in the Southern District of Ohio.
Xu targeted employees at companies such as GE Aviation and encouraged them to travel to China. Xu paid for these experts to travel to China under the pretense that they would be making a presentation at a university. A vast network of government organizations working together, both domestically and abroad, undertook this investigation. As a Deputy Division Director with the MSS, Xu was responsible for counter-intelligence, foreign intelligence, and political security.
Four Chinese State-Owned Industrial Companies Arraigned In Economic Espionage Conspiracy (2018)
Each of four state-owned Chinese organization and two officers were charged with conspiracy to commit economic espionage and related crimes. The indictment seeks forfeiture of all property used in the offenses or derived from the commission of said offenses. This alleged corporate espionage occurred when the defendants attempted to illegally obtain trade secrets for technology related to chloride-route titanium dioxide (TiO2) from the DuPont Company.
The Pangang Group Company allegedly collaborated with Hou Shandong and Dong Yingjie (Chinese nationals) and three company subsidiaries (Pangang Group International Economic & Trading Company, Pangang Titanium Industry Company Ltd., and Pangang Group Steel Vanadium & Titanium Company Ltd.) to obtain stolen trade secrets. The defendants allegedly obtained photographs related to TiO2 plant technologies and facilities. Furthermore, it is alleged that the defendants spent twenty-seven million dollars on outside contractors in hopes of obtaining DuPont trade secrets. Defendants also attempted to obtain information related to DuPont’s TiO2 processes illegally.
All four of the companies pleaded not guilty to the charges. The indictment charges each of the defendants with one count of conspiracy to commit economic espionage and one count of attempted economic espionage. The charges were the result of an investigation by the Federal Bureau of Investigation (FBI). The Special Prosecutions and National Security United of the United States Attorney’s Office are handling the prosecution.
Two Businessmen Charged With Conspiring to Commit Economic Espionage for the benefit of Chinese Manufacturing Company (2018)
Gang Liu, a Chinese national, and Shan Shi, a resident of Houston, Texas were indicted on charges of conspiracy to commit economic espionage. The two businessmen were working for the benefit of CBM-Future New Material Science and Technology Co. Ltd. (CBMF), a company based in Taizhou, China. It is also charged that CBMF and CBM International, Inc. (CBMI), CBMF’s Houston-based subsidiary had roles in the conspiracy.
The alleged target of the corporate espionage was a United States engineering firm that produces syntactic foam, which is a lightweight and durable material used commercially and militarily. Each of the defendants, along with others including a Canadian citizen and another Chinese national had previously been charged. In December of 2017, an additional defendant pleaded guilty to a charge of conspiracy to commit theft of trade secrets. Furthermore, Shi faces an additional charge of conspiracy to commit federal money laundering.
This case was conducted by a handful of federal agencies. Agents from the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and the Department of Homeland Security (DHS) contributed to the investigation. The United States Attorney’s Office for the District of Columbia will be handling the prosecution.
Chinese National Sentenced In White Plains Federal Court For Economic Espionage And Theft Of A Trade Secret From U.S. Company (2018)
Xu Jiaqiang has been sentenced to five years in prison after pleading guilty to six charges related to economic espionage and theft of trade secrets. Xu was also ordered to pay a one hundred dollar special assessment. Xu admitted to stealing proprietary source code from his former employer with the intent of benefiting the National Health and Family Planning Commission of the People’s Republic of China.
Xu worked as a developer for a United States company where he had access to proprietary software and the underlying source code. The victim company took various precautions to prevent disclosure of the trade secrets, such as the institution of a firewall and restricted employee access. Upon resignation from the victim company, Xu had communications with two undercover officers, during which he spoke about his time working for the victim company. He subsequently provided the undercover officers with a code, later confirmed to be related to the proprietary source code of victim company.
After establishing trust and knowledge with the undercover officers, Xu offered to provide the source code as a platform to develop a data-storage system. The Federal Bureau of Investigation (FBI) set up a network in compliance with the specifications provided by Xu. Once the network was uploaded, the FBI received confirmation from victim company that it was indeed their proprietary source code.
Are You At Risk Of Prosecution for Corporate Espionage?
Taking actions related to proprietary information or trade secrets of United States corporations can put you at risk of prosecution.
If you are an employee or owner of a foreign corporation that is either state-owned or closely tied to a foreign government you are likely to be under increased scrutiny. Furthermore being a foreign national working for a U.S. corporation may also make you a target of enhanced scrutiny.
The United States government takes the trade secrets of its corporations very seriously, and any action related to the storage or transmission of trade secrets is likely to be subject to a corporate espionage investigation.
What federal statutes cover Corporate Espionage?
The Economic Espionage Act of 1996 codifies the crime of corporate espionage. 18 U.S.C. § 1831 states that a person that intentionally or knowingly steals, copies, possesses, or receives documents that convey a trade secret for the benefit of a foreign entity shall be guilty of economic espionage and can be fined up to five million dollars, imprisoned for up to fifteen years, or both. If the offense is committed by an organization, they can be fined three times the value of the misappropriated trade secrets, not to exceed ten million dollars.
What Are Crimes Related to Corporate Espionage?
In addition to economic espionage, 18 U.S.C. § 1831 also provides for attempted economic espionage and conspiracy to commit economic espionage — furthermore, 18 U.S.C. § 1832 covers the theft of trade secrets.
In order to be convicted of theft of trade secrets, a party must have the intent to convert a trade secret into a product or service to be used for the economic benefit of anyone other than the real owner. This statute provides for imprisonment of up to ten years and fines of three times the value of the trade secrets, not in excess of five million dollars.
Why You Need Us In Your Corner
Our attorneys have been successfully representing parties’ accused of corporate espionage for many years. Communicating with the various Federal Agents and Agencies can be a frightening and confusing process. Proceeding through the investigation process without legal representation can expose you to extensive liability. With decade-plus prison sentences and multi-million dollar fines, you cannot afford to take any chances or have any communications while unrepresented.
If you have been accused of committing corporate espionage, please contact one of our skilled and experienced lawyers today.