Thursday, October 20, 2011

Canadian Scientist Pleads Guilty to Economic Espionage, Faces 25 Years in Prison

Kexue Huang, 46, a Canadian citizen, pleaded guilty in U.S. District Court in Indianapolis, IN on Tuesday (October 18) to statutory violations of the Economic Espionage Act of 1996 (EEA) and trade secret theft. Potentially, he could face 25 years in prison his crimes.

Chinese-born Huang was indicted in June 2010 and charged under the EEA, which was enacted after the US determined other countries were spying on private businesses. Huang's case is the eighth to be tried under the 15-year-old law. During 2007-2010, Huang delivered trade secrets on an organic pesticide he helped develop at Dow AgroSciences in Indiana to persons in Germany and China and used the stolen materials to conduct unauthorized research with the intent to help foreign universities linked to China.

COMMENT: After joining Minnetonka, MN-based Cargill, Inc. in March 2008, Huang stole a key component to make a new food product and gave it to a student at Hunan Normal University in China, according to the indictment. The total loss from the charges Huang pleaded guilty to came to US$17 million, but a Justice Department spokesman said Huang was responsible for a total of US $300 million in losses.

Unfortunately, Huang took advantage of his proprietary access to the trade secrets at two of America's largest agricultural companies to steal valuable trade secrets for use in his native China. That being said, several of the convictions under the EEA have included defendants who are ethnic Chinese. Despite their being fully aware of non-disclosure agreements they have executed, somehow they have rationalized that the home of their birth trumps the nation they have sworn allegiance to. Hence, they should reconcile in their mind which country they want to be loyal to and carry that nation's passport.

Currently, there are steps underway to amend the EEA in order to keep abreast of changing technology that eases the theft of trade secrets, particularly as regards documented paper-trails. Please see the below link:


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