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Prison Term, Penalties Possible for Individuals Charged with Stealing Trade Secrets for China

Monday, May 29, 2017
Sandler, Travis & Rosenberg Trade Report

The Department of Justice reports that seven individuals have been charged with conspiring to steal trade secrets from a U.S. business on behalf of a Chinese company engaged in manufacturing a high-performance, naval-grade product for military and civilian uses. The federal government has also filed a related civil forfeiture complaint for two pieces of real property involved in the alleged illegal conduct.

According to DOJ, an affidavit filed in support of the criminal complaint alleges that for several years a Chinese manufacturer and employees of its U.S.-based company engaged in a systematic campaign to steal the trade secrets of a global engineering firm that is among the major producers of syntactic foam, a material that can be tailored for commercial and military uses such as oil exploration, aerospace, underwater vehicles, and stealth technology. Among other things, the Chinese company used cash incentives and high-paying positions to hire employees of the U.S. company with experience in the production of syntactic foam who subsequently allegedly provided various trade secrets.

The maximum penalty for a person convicted of conspiring to commit theft of trade secrets is ten years in prison and potential financial penalties.

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