Jerry Jindong Xu, a Canadian citizen, pleaded guilty to one count of conspiracy to steal trade secrets from Chemours in an elaborate plan that he hoped would lead to a rival chemical plant in the neighboring nation.
According to court documents, the conspiracy involved the theft of trade secrets related to sodium cyanide, a chemical most often used to mine gold, silver, and other precious metals.
The Chemours Company is the world’s largest producer of sodium cyanide and does research and development for sodium cyanide products at its nearby Experimental Station. Those activities will be shifted to a new R&D center in Newark in coming years.
According to court filings, from 2011 to June 2016, Xu was employed in Chemours’ Ontario office, where he marketed various sodium cyanide-based products developed in the United States to the Canadian mining market.
Xu previously worked for seven years in China for Chemours predecessor company, DuPont, where he cultivated ties with the Chinese cyanide and mining industry.
He was arrested in New York in August 2017 and arraigned in Wilmington on September 28, 2017. At the time of his arrest, the Royal Canadian Mounted Police executed a search warrant on behalf of the United States.
Xu admitted that during his final year of employment with Chemours, he acquired – through various actions, false statements to colleagues, and sometimes through his legitimate employment duties – dozens of confidential files, many of which included trade secret information about Chemours’ sodium cyanide business.
During this same time, the defendant established a side company, called Xtrachemical. Its purpose was to solicit Chinese-based investors to build a sodium cyanide plant in Canada – in competition with Chemours.
According to the filings, he undertook the following
(1) misled his colleagues and fabricated assignments in order to accumulate vast amounts of pricing and other information, including obtaining passwords for spreadsheets; (2) used various personal email accounts to transfer confidential and trade secret information to himself and others; (3) used an encrypted Chinese-based messaging service to communicate with his co-conspirators; (4) asked for and received a tour of Chemours’ primary sodium cyanide manufacturing plant, during which he secretly took pictures of plant system diagrams and sent them to himself; (5) explained to one Chinese investor that he wanted to do this illicit project “for himself and not to slave away at this only to benefit someone else”; (6) accessed Chemours documents during a 2016 trip to China, and asked his co-conspirator how much their plant project would be worth, “Would you say in the millions?”; and (7) received a communication from a Chinese investor who indicated that it is common practice in China to steal the technology from others, design the layout, and get the plan stamped by a design institute.
Xu is currently being detained until sentencing. The maximum punishment for conspiracy to commit theft of trade secrets is ten years imprisonment and up to three years of supervised release. No date for the sentencing hearing has been scheduled.
“U.S. companies, like Chemours, invest millions of dollars to develop proprietary products and technologies. The theft of these trade secrets so that investors from other countries, like China, can gain an unfair advantage is unacceptable. We will use every tool at our disposal to identify and prosecute those responsible for these crimes. I want to thank the FBI and the Royal Canadian Mounted Police for their extraordinary work in this investigation,” said U.S. Attorney for Delaware David Weiss.
FBI Special Agent-in-Charge Johnson said, “The theft of trade secrets negatively impacts individual companies and our economy and for this reason, the FBI will continue to aggressively investigate these activities.”
The case is being prosecuted by Assistant U.S. Attorneys Jamie M. McCall and Alexander Mackler. Trial Attorney Alex Kalim, from the Criminal Division’s Office of International Affairs, provided support.
