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Chinese Espionage Alleged to Have Targeted DuPont

Courtesy of DuPont(WASHINGTON) -- The Justice Department Wednesday charged that Chinese-controlled companies conspired to steal production secrets potentially worth billions of dollars from U.S. chemical giant DuPont.

The long-running, multi-billion-dollar economic espionage plot was revealed as five people and five companies were indicted for allegedly stealing trade secrets to benefit companies controlled by the People’s Republic of China.

The conspiracy reportedly centered on DuPont because it produces one of the world’s most valuable and ubiquitous pigments -- titanium dioxide.  Titanium dioxide infuses a bright, white, reflective glow in coloring paint, plastics, paper and other commercial products.  The worldwide titanium dioxide market has been valued at about $12 billion, and DuPont controls the largest share of the market.  

The Justice Department indictment charges that the Chinese tried to steal unique, titanium dioxide production technology from DuPont and use it to open a new, 100,000-ton titanium dioxide plant at Chongqing, China.

To achieve that goal, the Justice Department charges, “companies controlled by the PRC government, specifically the Pangang Group companies …conspired and attempted to illegally obtain titanium dioxide (TiO2) technology that had been developed over many years of research and development…by DuPont.”  The Pangang Group is the Chinese company that was to have built the titanium dioxide plant in Chongqing, according to the Justice Department.

Pangang and four other corporate defendants are charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets and attempted economic espionage. The Justice Department said the Pangang Group companies paid “significant sums of money” to at least five insiders for DuPont’s trade secrets.

"The theft of America’s trade secrets for the benefit of China and other nations poses a substantial and continuing threat to our economic and national security,” Assistant Attorney General Lisa Monaco said. “We are committed to holding accountable anyone who robs American businesses of their hard-earned research. I thank the agents and prosecutors who helped bring about this important case.”  

The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco, and the Counterespionage Section of the U.S. Department of Justice. The investigation, which is ongoing, is being conducted by the FBI.

DuPont spokesman Dan Turner issued this statement late Wednesday:

“DuPont has taken, and will continue to take, aggressive measures to protect its proprietary, unique and confidential technologies for the benefit of our shareholders, employees and customers. We are disappointed that former DuPont employees working together with certain companies allegedly stole our proprietary technology.  Upon learning of the apparent breach, we took prompt action and filed a civil suit.  We also referred the theft of our technology to law enforcement.” Because this matter is pending both criminally and civilly, we cannot comment further.”

The Chinese embassy did not immediately return calls for comment.

Copyright 2012 ABC News Radio

ABC News Radio