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Ex-Dow Agro scientist pleads guilty in espionage case

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Former Dow AgroSciences researcher Kexue Huang pleaded guilty Tuesday morning to sending trade secrets worth millions to China and Germany.

Federal Judge William Lawrence in U.S. District Court in Indianapolis accepted Huang’s guilty plea but did not set a sentencing date.

Lawrence said Huang could face the potential of 70 months to 162 months in prison. The eventual sentence will be offset by factors that include time served and an apparent absence of previous criminal history.

Chinese-born Huang, 48, was shackled in chains and flanked by two defense attorneys in the Indianapolis courtroom.

“Would you, as best you can, raise your right hand,” the judge said, administering the oath to Huang, who had difficulty at times communicating with the judge.

“Are you able to read and write and understand English?” Lawrence asked.

“Most of it,” Huang replied.

Huang was indicted first in Minnesota, alleged to have obtained trade secrets of a food product from Cargill Inc. He also was indicted in Indiana and was alleged to have passed on information about a Dow Agro organic pesticide.

The government said the trade secrets and biological material were given to Hunan Normal University in China.

Some of that information allegedly was passed on to a person who attended a technical university in Dresden, Germany.

Justice Department spokesman Tim Horty said Dow invested $300 million developing information allegedly stolen, but the plea agreement values the total losses from Huang's conduct at $7 million to $20 million.

FBI agent Matthew Stahl took the stand in court Tuesday, testifying that German authorities, through an agreement signed in 2009, helped U.S. law enforcement officials obtain electronic records and biological materials in Germany.

Huang was indicted last year on 12 counts of theft and attempted theft of trade secrets to benefit a foreign government or instrumentality, along with transportation of stolen property.

The case was brought under the Economic Espionage Act, passed in 1996 after the U.S. realized China and other countries were targeting private businesses as part of their spy strategies.

Lawrence explained to Huang that he had a right to seek a trial, instead of agreeing to plead guilty.  

Federal prosecutors recommended that the judge accept the plea agreement, calling Huang a “brilliant scientist” in search of the American dream. But they said Huang nevertheless committed “subterfuge” and a “clandestine operation on behalf of the People’s Republic of China.”

Lawrence said he wanted companies victimized by the theft to have an opportunity to speak at the upcoming sentencing hearing. Huang could be asked to make restitution.

Unless other information surfaces, the plea should conclude the government’s case against Huang, U.S. Attorney Joseph Hogsett said after the hearing.
 
As IBJ reported in September 2010, Huang's story reads like a spy novel.

Dow AgroSciences is a subsidiary of Midland, Mich.-based Dow Chemical Co.

Huang is a Canadian citizen with permanent U.S. resident status.

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