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Economic espionage case full of intrigue

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The government's allegations read like a spy novel: Dr. Ke-xue "John" Huang lands a job at Indianapolis-based Dow AgroSciences and over five years works himself into a position of trust, with access to trade secrets and processes the company has invested $300 million to develop.

Along the way, federal prosecutors say, the Carmel resident shares information about how to make a lucrative line of organic insecticides with contacts in Germany and his native China. Huang also secretly directs research at a Chinese university on Dow AgroSciences trade secrets, recruits investors and drafts a business plan for a new company in China that would begin producing its own insecticides as soon as the Dow patents begin to expire in 2012 – potentially bringing in  the equivalent of more than $26 million in its first two years.

Federal authorities say Huang passed along information about the organic insecticide to Hunan Normal University, where he is an adjunct professor, while he worked as a researcher for Dow AgroSciences in Indiana from January 2003 to February 2008. The government on Tuesday also revealed it is investigating Huang's short stint working at Cargill, another chemical company, after he was fired by Dow AgroSciences.

Attorneys for Huang, 45, have denied the allegations, blaming the dust-up on his zeal for research and publishing in scientific journals. The Indianapolis Business Journal first reported on the allegations in July.

A grand jury indictment, unsealed Tuesday, lists 17 charges, including 12 involving theft or attempted theft of trade secrets under the 14-year-old Economic Espionage Act. The law, rarely used in court, is aimed at those who knowingly target or acquire trade secrets and knowingly benefit any foreign government or instrumentality.

Five additional counts involve interstate and foreign transportation of stolen property. At least 15 of Huang's former neighbors and friends from Carmel attended the hearing in a show of support.

U.S. Attorney Cynthia Ridgeway said Huang engaged in "patient and calculating maneuvering" to gain access to Dow Agro's trade secrets and had been working on plans for a company that would begin selling a competing product as soon as the Dow patents expired.

"He now has the full recipe: the products, the manufacturing facilities and patents about to expire," said Ridgeway, who cited three e-mails that suggest Huang was working on a business plan built on his insider information. Huang has been held since his arrest July 13 in Massachusetts, where he now lives.

FBI Special Agent Karen Medernach said in testimony Tuesday that Huang took eight trips to China between May 2007 and December 2009, and on at least one occasion packed vials of a chemical substance in his son's suitcase to avoid detection.

Daniel Kittle, Dow Agro's vice president of research and development, pegged the value of the technology Huang took at more than $300 million. He said the company objects to releasing Huang before trial because doing so would put in jeopardy 20 years of work by the company's scientists.

"Dr. Huang was put in a lead role, a position of trust with access to trade secrets," Kittle said. "He violated that trust repeatedly, on dozens and dozens of occasions."

Ridgeway argued Huang is a flight risk, a seasoned world traveler with minimal ties to the United States and a strong incentive to flee prosecution and set up shop making chemicals overseas. Releasing him from custody could cause "irreversible" economic damage to Dow Agro and the local community, she argued.

Huang's attorney, Michael Donahue, disagreed, pointing to the fact he and his wife just put their $300,000 life savings into a new house near Boston. The couple are Canadian citizens and have two children, one a U.S. citizen and the other Canadian. And they've surrendered their passports, meaning they cannot leave the country.

Huang's wife, Jie Sun, teared up at the hearing Tuesday as she offered testimony in support of her husband. She said the children miss their father, and offered to put up their new home as collateral to ensure Huang shows up in court.

"There's no reason for us to go anywhere else," she said. "This is our home."

In the U.S. District Court, Southern District of Indiana, Magistrate Judge Kennard Foster, who entered a not-guilty plea on Huang's behalf, agreed with prosecutors that Huang is a flight risk and ordered him held. The move overturned a decision in Massachusetts suggesting supervised release would be appropriate.

Dow AgroSciences, which employs 1,200 people in central Indiana, is a unit of Dow Chemical Co.
 

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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