2 men guilty in sale of trade secrets to China

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SAN FRANCISCO (AP) - Two men were convicted Wednesday of stealing an American company’s secret recipe for making a chemical used to whiten products from cars to the middle of Oreo cookies and selling it to a competitor controlled by the Chinese government.

The four-man, eight-woman federal jury found Robert Maegerle, 78, and Walter Liew, 56, guilty of economic espionage and each could face 15 years or more in prison and hundreds of thousands of dollars in fines.

Noting Liew’s connections to China, U.S. District Judge Jeffrey White ordered him taken into custody immediately.

“He has received millions of dollars from the People's Republic of China that remains unaccounted for,” White said. “That’s a lot of money that could help someone flee.”

Liew’s lawyer, Stuart Gasner, said he would appeal.

“We are very disappointed,” Gasner said in a prepared statement. “Walter Liew is a good man in whom we believe and for whom we will continue to fight.”

The two men were convicted in San Francisco of stealing Delaware-based DuPont Co.’s method for making titanium dioxide, a chemical that fetches $17 billion a year in sales worldwide.

Federal prosecutors said Liew and his wife, Christina Liew, launched a small California company in the 1990s aimed at exploiting China’s desperate desire to build a DuPont-like factory to make the chemical.

The couple recruited former DuPont scientists with the single-minded goal of winning Chinese contracts. Maegerle worked for DuPont from 1956 to 1991 before joining the Liews. Prosecutors said he provided the Liews with detailed information about DuPont’s Taiwan factory.

Tze Chao, another former DuPont scientist who worked with the Liews, pleaded guilty in 2012 to conspiracy to commit economic espionage and will be sentenced later. Tim Spitler, a former DuPont engineer linked to the case, committed suicide.

A trial for Christina Liew is scheduled for later this year.

Prosecutors say Walter Liew received more than $20 million from the Chinese company Pangang Group for efforts started in the 1990s to deliver the recipe to China.

Maegerle remained free on bond pending his sentencing scheduled for June 10. He declined to comment as he left court. He could face a maximum of 15 years in prison.

The defendants had argued that the Chinese obtained the information from public sources, such as expired patents, and nothing was stolen from DuPont.

However, DuPont spokesman Daniel Turner said “the verdict underscores the consequences faced by those who steal trade secrets.” He added that the company will continue to take aggressive steps to preserve its technological edge, including cooperating with governments and law enforcement agencies around the world.

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