Conviction in Economic Espionage Case

The first-ever federal convictions by a jury for economic espionage were handed down Wednesday against Malaysian-born businessman Walter Liew, for stealing DuPont Co.’s trade secrets in order to start a competing production factory in China.

Liew, 56, a U.S. citizen, was taken into custody immediately after the verdict was read. The government has said Liew gained as much as $20 million in the plot.  He was accused of conspiring with a former DuPont employee to steal the formula for making making titanium dioxide, a white pigment used in paper and plastics.

Liew, his company USA Performance Technology Inc and Robert Maegerle, a former DuPont employee, were convicted of conspiracy to steal trade secrets for sale to a foreign government, attempted theft and obstruction of justice.  Maegerle remained free on bond.

In addition, Liew was convicted of possession of trade secrets, lying to the FBI, filing false tax returns and bankruptcy fraud.  He was convicted of three counts of obstruction of justice and Maegerle was convicted of a single obstruction count.

The verdict came after 31 days of trial in San Francisco.

In opening statements, Liew’s defense lawyers maintained that the information in production of titanium oxide has been publicly disclosed over the years.  They argue Liew did nothing illegal and was engaged in an effort to start a factory in China to make the same material.

Two other DuPont employees and Liew’s wife were charged in the case.  Liew’s wife will be in court Thursday to set a date for her trial. One former DuPont employee pleaded guilty and cooperated with prosecutors

Liew operated USA Performance Technology Inc. and received a contract from China’s Pangang Group Co. to build a titanium dioxide plant in Chongqing.  Prosecutors say he wanted to use the manufacturing process invented by DuPont in the 1940s.

Pangang was also charged in the indictment.  But U.S. District Judge Jeffrey White has said the government failed to meet legal standards for summoning the company to face trial.  Prosecutors say they hope to appeal that decision.

Sentencing was set for June 10.

Case:  U.S. v. Liew, No. 11-cr-573JS

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