Trade Secrets to Competitors in China

On Dec. 10, 2014, Janice Kuang Capener, a citizen of China, was sentenced in the District of Utah to 90 days in prison, 24 months supervised release, $100 special assessment, and a $3,000 fine. Capener pleaded guilty on Sep. 11, 2014 to Count 3 of a second Superseding Indictment which charged the defendant with theft of trade secrets. Previously, on May 7, 2012, prosecutors unsealed an indictment charging Capener, Jun Luo and two companies, Sunhills International LLC, a California company established by Capener, and Zhejiang Hongchen Irrigation Equipment Co., LTD., with theft of trade secrets, wire fraud, and conspiracy to commit wire fraud in connection with the alleged theft of trade secrets from Orbit Irrigation Products, an irrigation company headquartered in Utah. According to court documents, Capener worked at Orbit from Jun. 2003 through Nov. 1, 2009, including serving as the chief of operations at Orbit’s manufacturing plant in Ningbo, China. Capener allegedly stole Orbit’s trade secrets relating to sales and pricing and used that information for herself and others to the detriment of Orbit. Capener also allegedly worked with Luo, Sunhills International and Zhejiang Hongchen Irrigation Equipment to devise a scheme to undermine Orbit’s position in the marketplace using illegally obtained proprietary pricing information. Capener and Luo were arrested on May 4, 2012. On Aug. 29, 2012, all charges against Luo, also a citizen of China, were dismissed. Zhejiang Hongchen Irrigation Equipment Co., Ltd., a Chinese company under contract with Orbit, pleaded guilty to Counts 1-5 of the original indictment and was sentenced to 36 months of probation, and ordered to pay a fine of $100,000 and restitution in the amount of $300,000 for its role in a scheme to defraud and conspiracy to commit wire fraud. This case was investigated by the FBI.