U.S. jury indicts China pair in trade secret theft

CNET ^ | Dec. 5, 2002 | Lisa Bowman and Stephen Shankland

[pttttt]

U.S. jury indicts pair in trade secret theft

By Lisa M. Bowman and Stephen Shankland, CNET News.com

A federal grand jury on Wednesday indicted two men on criminal charges of stealing trade secrets from Sun Microsystems, Transmeta and other computer technology companies with the intention of making and selling processors based on the technology in China.

Fei Ye and Ming Zhong face 10 counts of trade secret theft and economic espionage related to possessing stolen internal company documents from Sun, Transmeta, NEC Electronics and Trident Microsystems, according to an indictment filed in San Jose, Calif. The pair was arrested while trying to board a plane at San Francisco International Airport in November 2001.

They could face up to 95 years in prison and nearly $3 million in fines. Both men are free on bail, according to court documents.

According to the indictment, the men established a company called Supervision, or the Zhongtian Microsystems Company, and conspired to recruit others to work for them. They also allegedly applied for funding from the Chinese city of Hangzhou and the National High Technology Research and Development Program of China.

According to the indictment, Zhong had secret documents belonging to Trident in his Transmeta office. Fei Ye allegedly possessed a charter for the new company at his Silicon Valley home that said the project would boost China's ability to develop high-end processors and help it better compete in the market.

The men also allegedly possessed documents praising the Zhongtian project because it would enable China to autonomously develop an embedded processor and basic system chips.

Trade secret theft largely has been the domain of civil lawsuits, but law-enforcement authorities have become more active. In 2001, for example, criminal trade secret charges were filed against a software company called Avant, now part of Synopsys, and against an employee of the Barksdale Group investment company.

Sun declined to comment beyond the information in the indictment. Transmeta didn't immediately respond to requests for comment.

[pttttt]

Missed this with all the other stuff going on.

[B4Ranch]

ping

[HighRoadToChina]

They need to be sentenced as an example to all the PRC spies and want-to-be's.

[Cindy]

CYBERCRIME.gov: "Pair from Cupertino and San Jose, California, Indicted for Economic Espionage and Theft of Trade Secrets From Silicon Valley Companies" (ARTICLE SNIPPET: "The United States Attorney’s Office for the Northern District of California announced that two people were indicted today for economic espionage, possession of stolen trade secrets, transportation of stolen property, and conspiracy. The charges stem from a conspiracy allegedly carried out by the defendants to take trade secrets stolen from four Silicon Valley companies to the People’s Republic of China (PRC). Fei Ye, a/k/a Ye Fei, age 36 of Cupertino, California, and Ming Zhong, a/k/a Zhong Ming, a/k/a Andy Zhong, age 35 of San Jose, California, were indicted by a federal grand jury on a total of 10 counts, including one count of conspiracy in violation of 18 U.S.C. §§ 371, 1831(a)(5) and 1832(a)(5), two counts of economic espionage in violation of 18 U.S.C. § 1831(a)(3), five counts of possession of stolen trade secrets in violation of 18 U.S.C. § 1832(a)(3), and two counts of foreign transportation of stolen property in violation of 18 U.S.C. § 2314. Fei Ye is a citizen of the United States; Ming Zhong is a permanent resident. Both defendants are originally from China. The indictment does not charge that the Chinese government was a conspirator. According to the indictment, it is alleged that Fei Ye and Ming Zhong conspired to commit the offenses of economic espionage, possession of stolen trade secrets, and foreign transportation of stolen property. The trade secrets were allegedly stolen from four companies: Transmeta Corporation (Transmeta); Sun Microsystems, Inc. (Sun); NEC Electronics Corporation (NEC); and Trident Microsystems, Inc. (Trident), all high-tech companies in Silicon Valley. Both defendants are former employees of Transmeta and Trident. Fei Ye also worked at Sun and NEC. Some of the stolen trade secrets were seized from the defendants at the San Francisco International Airport (SFO) while they were attempting to fly to China. Other trade secrets were seized from the defendants’ residences and Ming Zhong’s Transmeta office in the County of Santa Clara.")(December 4, 2002) (Note: Click Here to read the entire article.)