Scientist Convicted By Federal Jury Of Conspiracy To Steal Trade Secrets Belonging To GlaxoSmithKline

The U.S. Attorney’s Office in Philadelphia released the below information:

PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that Gongda Xue, 52, formerly a resident of Allschwil, Switzerland, a legal permanent resident of Switzerland and citizen of China, was convicted after trial of charges related to his participation in a conspiracy to steal trade secrets from GlaxoSmithKline (GSK) pertaining to biopharmaceutical products under development from January 2010 to January 2016.

During the offense conduct, Gongda Xue worked as a scientist at the Friedrich Miescher Institute for Biomedical Research (“FMI”) in Switzerland, which is affiliated with Novartis. His sister, Yu Xue, worked as a scientist at GSK in Pennsylvania. Both the defendant and his sister conducted cancer research as part of their employment at these companies.  Their research was sensitive and confidential.  Consequently, GSK and FMI required Yu Xue and Gongda Xue respectively to sign confidentiality agreements as part of their employment.  While the defendant performed basic research for publication in journals, the defendant’s sister performed research relating to GSK’s anti-cancer drugs under development. Evidence presented at trial showed that the defendant knew that GSK’s research could prove incredibly valuable, and that it was proprietary and confidential. 

While working for their respective entities, the defendant and his sister betrayed their employers and shared confidential information for their own personal benefit.  Gongda Xue created Abba Therapeutics AG in Switzerland and Yu Xue and her associates formed Renopharma, Ltd., in China. Both companies intended to develop their own biopharmaceutical anti-cancer products.  Renopharma received direct funding and support from the government of China.  Gongda Xue stole FMI research into anti-cancer products and sent that research to Yu Xue.  Yu Xue, in turn, stole GSK research into anti-cancer products and sent that to Gongda Xue.  Yu Xue also provided hundreds of GSK documents to her associates at Renopharma.  Renopharma then attempted to re-brand GSK products under development as Renopharma products and attempted to sell them for billions of dollars. Renopharma’s own internal projections showed that the company could be worth as much as $10 billion based upon the stolen GSK data. 

Fortunately, in January 2016, the FBI arrested Yu Xue and her Renopharma associates, seized e-mail accounts containing the stolen GSK data, and seized the funds in a Renopharma bank account in order to prevent Renopharma from achieving its goals and monetizing the stolen GSK information.  Gongda Xue was charged in 2018 and extradited from Switzerland to the United States in December 2019. 

Two former GSK employees, Yu Xue and Lucy Xi, have pleaded guilty for their roles in sending GSK trade secrets to Renopharma.  Yu Xue's sister, Tian Xue, pleaded guilty to a money laundering conspiracy for agreeing to launder the substantial ill-gotten gains which Renopharma expected to receive.  One of the directors of Renopharma, Tao Li, also pleaded guilty for his role in conspiring to steal GSK trade secrets.  The other director of Renopharma, Yan Mei, is a fugitive who currently resides in China. 

“This defendant illegally stole trade secrets to benefit companies controlled by himself and his sister, one of which were financed by the Chinese government,” said U.S. Attorney Williams. “The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of American jobs and disincentivizes research and development. Such criminal behavior must be prosecuted to the fullest extent of the law.”

“When a company like GSK spends billions on research and development to bring new drugs to market, the theft of valuable trade secrets poses a significant operational threat,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “When those secrets are stolen on behalf of a global adversary, it also endangers the security of our nation and the stability of our economy. The FBI will continue to bring all our investigative resources to bear to hold accountable criminals like Xue and his codefendants who steal intellectual property to benefit themselves and the Government of China. Our relationships with private sector partners like GSK are critical to disrupting such costly activity and bringing those responsible to justice.”

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and J. Jeanette Kang.  Extradition assistance was provided by the U.S. Department of Justice, Office of International Affairs.  The U.S. Attorney would also like to thank GlaxoSmithKline and Novartis for their extraordinary cooperation on this important investigation.

Communist Chinese Company Sinovel Wind Group Convicted Of Theft of Trade Secrets

The U.S. Justice Department released the below link:

A manufacturer and exporter of wind turbines based in the People’s Republic of China was convicted today of stealing trade secrets from AMSC, a U.S.-based company formerly known as American Superconductor Inc., announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Scott C. Blader for the Western District of Wisconsin.

Following an 11-day trial, a jury sitting in Madison, Wisconsin, convicted Sinovel Wind Group Co. Ltd., dba Sinovel Wind Group (USA) Co. Ltd. (Sinovel) of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud.  Sentencing is set for June 4.

“Sinovel nearly destroyed an American company by stealing its intellectual property,” said Acting Assistant Attorney General Cronan.  “As today’s jury verdict demonstrates, this type of conduct, by any corporation – anywhere – is a crime, and won’t be tolerated.  The Department is dedicated to helping foster innovation and growth in our economy by deterring and punishing intellectual property theft from American companies.”

“Today’s verdict sends a strong and clear message that the theft of ideas and ingenuity is not a business dispute; it’s a crime and will be prosecuted as such,” said U.S. Attorney Blader.  “Sinovel’s illegal actions caused devastating harm to AMSC.  I commend the efforts of the investigation and prosecution team, and reaffirm the commitment of this office to protect American commerce and prosecute those who would seek to steal intellectual property.”

As proven at trial, Sinovel stole proprietary wind turbine technology from AMSC in order to produce its own turbines powered by the stolen intellectual property.  AMSC developed the technology – software that regulates the flow of electricity from wind turbines to electrical grids – in Wisconsin and elsewhere.  At the time of the theft in March 2011, Sinovel had contracted with AMSC for more than $800 million in products and services to be used for the wind turbines that Sinovel manufactured, sold, and serviced.

Sinovel was charged on June 27, 2013, along with Su Liying, the deputy director of Sinovel’s Research and Development Department; Zhao Haichun, a technology manager for Sinovel; and Dejan Karabasevic, a former employee of AMSC Windtec Gmbh, a wholly-owned subsidiary of AMSC.  The evidence presented at trial showed that Sinovel conspired with the other defendants to obtain AMSC’s copyrighted information and trade secrets in order to produce wind turbines and to retrofit existing wind turbines with AMSC technology without paying AMSC the more than $800 million it was owed and promised.  Through Su and Zhao, Sinovel convinced Karabasevic, who was head of AMSC Windtec’s automation engineering department in Klagenfurt, Austria, to leave AMSC Windtec, to join Sinovel, and to steal intellectual property from the AMSC computer system by secretly downloading source code on March 7, 2011, from an AMSC computer in Wisconsin to a computer in Klagenfurt.  Sinovel then commissioned several wind turbines in Massachusetts and copied into the turbines software compiled from the source code stolen from AMSC.  The U.S.-based builders of these Massachusetts turbines helped bring Sinovel to justice.  Su and Zhao are Chinese nationals living in China, and Karabasevic is a Serbian national who lived in Austria, but now lives in Serbia.

According to evidence presented at trial, following the theft, AMSC suffered severe financial hardship.  It lost more than $1 billion in shareholder equity and almost 700 jobs, over half its global workforce.

The case was investigated by the FBI’s Madison, Milwaukee, and Boston Offices; the FBI Legal Attachés’ Offices in Vienna, Austria and Beijing; the FBI Criminal Investigative Division; the FBI Intellectual Property Rights program; the Bundeskriminalamt (Federal Criminal Intelligence Service) and the Bundesministerium Fuer Justiz (Federal Ministry of Justice) in Austria; the Landeskriminalamt - Klagenfurt and the Staatsanwaltschaft - Klagenfurt (Criminal Investigative Police and State Prosecutor’s Office – Klagenfurt, Austria); and with the assistance of the Justice Department’s Office of International Affairs and the Cybercrime Laboratory of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS).

Senior Counsel Brian L. Levine of CCIPS and Assistant U.S. Attorneys Timothy M. O’Shea and Darren Halverson for the Western District of Wisconsin prosecuted the case, with substantial assistance from CCIPS Trial Attorney Joss Nichols and Digital Investigative Analyst Laura Peterson.

The Department of Justice’s Task Force on Intellectual Property (IP Task Force) contributed to this case.  The IP Task Force is led by the Deputy Attorney General to combat the growing number of domestic and intellectual property crimes, to protect the health and safety of American consumers, and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work.  To learn more about the IP Task Force, go to https://www.justice.gov/iptf.