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On Thursday afternoon, in a Federal Courthouse in San Fransisco, Tze Chao, age 77, a scientist that was employed by Dupont for 36 years, from 1966 to 2002, plead guilty to conspiracy to commit economic espionage.
During his court appearance, where he entered his plea, he admitted to the court that he had provided trade secrets involving DuPont’s proprietary manufacturing process for titanium dioxide, or TiO2 to the People’s Republic of China controlled company, the Pangang Group.
Chao had begun consulting for the Pangang Group in 2003, one year after leaving DuPont. Chao knew, according to documents, that the People’s Republic of China had placed a priority on developing chloride-process TiO2 technology, and that they wished to acquire that knowledge from western companies.
Chao submitted a bid to the Pangang Group to design a 100,000-ton per year facility to produce TiO2 for them. He included at that time, information that he knew to be secret information belonging to DuPont that was not available to the public. He did not win the bid. But, in 2009, the Pangang Group asked Chao to review design work done by USA Performance Technology. During that review, Chao provided additional trade secret information to the group.
Chao’s plea comes in connection with the superseding indictment returned three weeks ago charging Walter Liew, Christina Liew, Robert Maegerle, and USA Performance Technology, Inc., among others, for their efforts to sell DuPont trade secrets to companies controlled by the People’s Republic of China. Those companies—the Pangang Group and three subsidiaries—also were named as defendants in the indictment and charged with conspiracy to commit economic espionage and attempted economic espionage. As part of his plea agreement, Chao agreed to cooperate in the investigation and prosecution of this case.
Under the plea agreement, he was charged with one count of Conspiracy to Commit Economic Espionage. He was released after his plea on his own recognizance. He sentencing date has not been set.
The maximum statutory sentence for Conspiracy to Commit Economic Espionage is fifteen years in prison and a fine of $500,000. plus restitution. For his cooperation in the case, his sentence is likely to be much less than that however.
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