On May 1, 2015, Kolon Industries, Inc., a South Korean industrial\u00a0company, was sentenced in the Eastern District of Virginia to 5 years\u2019 probation and was ordered to pay\u00a0$400 special assessment, $85,000,000 in criminal fines and $275,000,000 in restitution. Kolon Industries,\u00a0Inc., appearing through two successor entities\u2014Kolon Industries, Inc. and Kolon Corporation\u00a0(collectively, Kolon)\u2014pleaded guilty in federal court on April 30, 2015, to one count of conspiracy to\u00a0convert trade secrets involving E.I. DuPont de Nemours & Co.\u2019s (DuPont) Kevlar technology. According\u00a0to the statement of facts filed with the plea agreement, from June 2006, to Feb. 2009, Kolon conspired\u00a0with former DuPont employees and others to steal DuPont\u2019s trade secrets for making Kevlar, a highstrength,\u00a0para-aramid synthetic fiber. Kevlar, a trademarked name, is one of DuPont’s most well-known\u00a0products and is used in a wide range of commercial applications such as body armor, fiber optic cables,\u00a0and automotive and industrial products. Kolon admitted that it was attempting to improve the quality of\u00a0its own para-aramid fiber known as Heracron. Kolon personnel met repeatedly with former DuPont\u00a0employees, including Edward Schulz of Brownstown, PA, and Michael Mitchell, of Chesterfield, VA, to\u00a0obtain confidential and proprietary DuPont information about Kevlar. Schulz pleaded guilty to\u00a0conspiracy to steal trade secrets in Sep. 2014, and was sentenced in July 2015, to 2 years\u2019 probation, 500\u00a0hours\u2019 community service, $100 special assessment and a $75,000 fine. Mitchell pleaded guilty to theft\u00a0of trade secrets and obstruction of justice in Dec. 2009, and was sentenced to 18 months in prison, 3 years\u00a0supervised release, $200 special assessment, and $187,895.90 in restitution. Kolon admitted that it\u00a0obtained technical and business documents regarding Kevlar, including instructional materials that\u00a0described DuPont\u2019s \u201cNew Fiber Technology,\u201d documents on polymerization, and a detailed breakdown of\u00a0DuPont\u2019s capabilities and costs for the full line of its Kevlar products and DuPont\u2019s Kevlar customers.\u00a0According to the statement of facts and Mitchell\u2019s admissions at his guilty plea, Mitchell exchanged\u00a0numerous telephone calls and emails with Kolon personnel. On more than one occasion, Mitchell advised\u00a0Kolon personnel that some of the information they sought was proprietary and that DuPont considered\u00a0such information to be trade secrets. Mitchell also coordinated a meeting at a hotel in Richmond, at\u00a0which Kolon personnel were introduced to a cooperating witness who pretended to be a disgruntled\u00a0scientist from DuPont. During the Richmond meeting, Kolon personnel indicated that they would only be\u00a0comfortable communicating with the cooperating witness in a manner that was confidential and that\u00a0would not leave an evidentiary trail. In Feb. 2009, DuPont filed a civil lawsuit against Kolon in the\u00a0Eastern District of Virginia, alleging theft of trade secrets. Thereafter, certain Kolon personnel attempted\u00a0to delete files and emails related to Mitchell, Schulz and outside consultants hired to improve Kolon\u2019s\u00a0para-aramid fiber, and urged other Kolon personnel to search for such materials and mark them for\u00a0deletion. Kolon also admitted that certain employees approached a former employee of an American\u00a0subsidiary of Teijin Ltd. \u2013 a Japanese company that makes the para-aramid fiber called Twaron\u2014in an\u00a0unsuccessful effort to obtain information about Twaron. This case represents the first time that foreign\u00a0corporations with no direct presence in the United States were found to be successfully served with U.S.\u00a0criminal process, over their objections, based on service pursuant to an international treaty. In Dec. 2014,\u00a0the district court found that both of the successor companies were properly served, and ordered them to\u00a0appear for arraignment. In Feb. 2015, the Fourth Circuit Court of Appeals denied Kolon\u2019s petition for\u00a0extraordinary relief seeking reversal of the district court\u2019s order. Five former Kolon executives and\u00a0employees, all of South Korea, were charged in an Aug. 2012, indictment filed in the Eastern District of\u00a0Virginia: Jong-Hyun Choi, a senior executive who oversaw the Heracron Business Team; In-Sik Han,\u00a0who\u00a0 managed Kolon\u2019s research and development related to Heracron; Kyeong-Hwan Rho, the head of the\u00a0Heracron Technical Team; Young-Soo Seo, the general manager for the Heracron Business Team; and\u00a0Ju-Wan Kim, a manager on the Heracron Business Team. The case was investigated by the FBI\u2019s\u00a0Richmond Division.<\/p>\n","protected":false},"excerpt":{"rendered":"
Trade Secrets to South KoreaOn May 1, 2015, Kolon Industries, Inc., a South Korean industrial\u00a0company, was sentenced in the Eastern District of Virginia to 5 years\u2019 probation and was ordered […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[107],"tags":[],"class_list":["post-3904","post","type-post","status-publish","format-standard","hentry","category-nsd201801"],"_links":{"self":[{"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/posts\/3904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3904"}],"version-history":[{"count":1,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/posts\/3904\/revisions"}],"predecessor-version":[{"id":3905,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=\/wp\/v2\/posts\/3904\/revisions\/3905"}],"wp:attachment":[{"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeremy-wu.info\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}