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$360 Million Penalty For Conspiracy to Steal Trade Secrets

Thursday, May 07, 2015
Sandler, Travis & Rosenberg Trade Report

A South Korean industrial company was sentenced to pay $85 million in criminal fines and $275 million in restitution after pleading guilty to conspiracy to steal trade secrets, the Department of Justice reports. The Korean company admitted that it obtained technical and business documents as part of an effort to improve the quality of a similar product that it manufactured. In addition, the company admitted to approaching a U.S. subsidiary of a Japanese firm that also makes a similar product in an unsuccessful effort to obtain information about that product.

Five former executives and employees of the Korean company have been indicted on related charges but have not appeared in the U.S. Two employees of the company whose trade secrets the Korean company was trying to steal have pleaded guilty to their roles in this scheme; one has been sentenced to 18 months in prison, while the other will be sentenced next month.

“Each year, billions of U.S. dollars are lost to foreign competitors who pursue illegal commercial short cuts by stealing valuable advanced technologies,” said Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Va., Division. “This case demonstrates the FBI’s ability to penetrate these highly sophisticated criminal schemes and bring their perpetrators to justice.”

A DOJ press release notes that this case represents the first time that foreign corporations with no direct presence in the U.S. were found to be successfully served with U.S. criminal process, over their objections, based on service pursuant to an international treaty.

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