US alleges DuPont TiO2 technology stolen for China

01 February 2012 22:23  [Source: ICIS news]

TiO2 is a white pigment used in paintHOUSTON (ICIS)--A man was ordered to stay in a US jail on Wednesday in connection with an alleged scheme to steal titanium dioxide (TiO2) trade secrets from DuPont on behalf of Chinese government officials.

A federal judge in San Francisco, California, ordered businessman Walter Liew to remain in detention as a flight risk pending trial, said Jack Gillund, a spokesman for the US Attorney’s Office.

The US attorney’s office opposed Liew’s release and alleged in a court document that investigators found a “trove of evidence … which shows Liew was selling trade secrets belonging to [DuPont] to companies controlled by the government of the People’s Republic of China [PRC]”.

"DuPont's state-of-the-art technology is not available publicly and PRC companies have not been able to master it on their own," prosecutors said. "Liew, however, obtained that technology from former DuPont employees and sold it to companies controlled by the PRC government."

Lawyers for Liew did not immediately respond to calls seeking comment. Calls to the Chinese embassy were unanswered

Liew is charged with witness tampering, conspiracy to tamper with witnesses and making a false statement in connection with the US probe.

In July, federal investigators appeared at Liew's home with a search warrant, the US alleged.

At the home, investigators found a key to a safe-deposit box and asked Liew's wife, Christina Liew, if she knew the location of the box, the government alleged.

Walter Liew told is wife in Chinese to lie, and she complied, saying that she did not remember the box's location, the government alleged.

However, one of the agents understood Chinese, the government said. Ultimately, they learned that the box was in a bank, and it was held in Christina Liew's name, the US alleged.

In the box, agents found evidence showing that Walter Liew was selling DuPont's trade secrets to companies controlled by China, the US alleged.

At Walter Liew's home, agents also found DuPont blueprints and handwritten notes showing that he knew the plans were stolen, the US alleged.

"The evidence shows that Liew was tasked by representatives of the PRC government to obtain technology used to build chloride-route titanium dioxide factories," the US said.

The Liews were arrested in August and charged with making false statements to the FBI. Both pleaded not guilty.

The US government argued on Tuesday that Walter Liew should remain in detention.

"The evidence shows that Liew has significant ties with PRC government and business interests," the US alleged.

To bolster its accusations, the US quoted a memorandum that Walter Liew allegedly wrote in 2004. The memorandum describes a December 1991 meeting with Luo Gan, who was then a high-ranking official of the central committee of the Communist Party of China, as well as the secretary general of the state council.

Days after the meeting, Liew allegedly wrote that he was given a list of key tasks from Chinese agencies, including obtaining chloride-route TiO2 production technology.

According to the US, Walter Liew had responding by saying that the evidence is not accurate or reliable and includes erroneous statements.

US prosecutors said they have evidence showing that Walter Liew allegedly obtained over $20m (€15m) from the sale of TiO2 technologies to Chinese companies.

In April, DuPont sued Liew, and his company, Performance Group (USA), also known as USA Performance Technology.

DuPont accused them of stealing the company's TiO2 technology and selling it to an unnamed company, which was building a TiO2 plant in China.

“We also referred the alleged theft to law enforcement,” said DuPont spokesperson Dan Turner.

Walter Liew denied the DuPont allegations.

In its complaint, DuPont did not allege that he had ties to the Chinese government.

Additional reporting by Brian Ford

($1 = €0.76)

By: Al Greenwood
+1 713 525 2645

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