SAN FRANCISCO -- An East Bay resident and the Oakland-based company he founded were found guilty of stealing DuPont'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 Walter Liew, 56, of Walnut Creek, guilty of economic espionage. Liew and his co-conspirator who was also found guilty, Delaware resident Robert Maegerle, 78, could face 15 years or more in prison and hundreds of thousands of dollars in fines.
The case was the first federal jury conviction on charges brought under the Economic Espionage Act of 1996.
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."
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 Walter Liew and his wife Christina Liew launched Oakland-based consulting firm USA Performance Technology in the 1990s. The company was 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.
Prosecutors say Liew received more than $20 million from the Chinese company Pangang Group for efforts started in the 1990s to deliver the recipe to China.
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."
In addition to economic espionage, Liew was also found guilty of witness tampering, filing false tax returns and bankruptcy fraud. He could face a maximum of 20 years in prison.
The tampering charge stems from a 2011 raid by the FBI on the Liews' home in Orinda. While seizing thousands of pages of documents, the FBI confronted Christina Liew about a key to a safe-deposit box.
In Mandarin Chinese, her husband admonished her to deny any knowledge of the key and she did. The FBI didn't disclose that one of its agents spoke fluent Mandarin.
Agents then followed Christina Liew to an Oakland bank that contained the box in question. It contained a "trove" of incriminating documents, according to prosecutors.
The rare criminal economic espionage case began when a disgruntled former employee of Liew wrote DuPont a letter about the Liews' efforts to secure its trade secrets. DuPont contacted the FBI, which launched an investigation.
DuPont also filed a lawsuit against the Liews and their company.
A trial for Christina Liew is scheduled for later this year.