SAN JOSE – Two Bay Area men were indicted today, September 26, 2007, on charges of conspiracy to commit economic espionage and to steal trade secrets, two substantive counts of economic espionage and two substantive counts of theft of trade secrets, U.S. Attorney Scott N. Schools announced. A federal grand jury in San Jose yesterday returned a superseding indictment against Lan Lee, a.k.a Lan Li, of Palo Alto, and Yuefei Ge, of San Jose.
The superseding indictment alleges that Mr. Lee, 42, and Mr. Ge, 34, conspired to steal trade secrets from their employer at the time, NetLogics Microsystems, and from Taiwan Semiconductor Manufacturing Corporation, another company where they were not employed. The superseding indictment further alleges that the defendants created a company, SICO Microsystems, Inc., for the purpose of developing and marketing products derived from and using the stolen trade secrets. The trade secrets involved related to computer chip design and development. The defendants sought to obtain venture capital funding for their company from the government of China, in particular the 863 Program and the General Armaments Department.
The 863 program is a funding plan created and operated by the government of the People’s Republic of China ("PRC"), and is also known as the National High Technology Research and Development Program of China. The program was designed by leading PRC scientists to develop and encourage the creation of technology in the PRC and focused on issues such as high technology communications and laser technology, with an emphasis on military applications. The General Armaments Department ("GAD") of the People’s Liberation Army was responsible for the Army, Navy, and Air Force in the PRC, and oversaw the development of weapons systems used by the PRC. The GAD had a regular role in, and was a major user of, the 863 program.
"The vigorous enforcement of intellectual property statutes increases the economic vitality of this region, and adds to the security of our nation as a whole," said United States Attorney Scott N. Schools. "This office is committed to the prosecution of individuals who seek to benefit foreign governments or instrumentalities with stolen trade secrets."
Lee, an American Citizen, and Ge, a Chinese national, had been released on the original indictment on $300,000 bonds. Their next scheduled appearance on the superseding indictment is on October 29, 2007, at 1:30 p.m.
The maximum statutory penalty for each count of conspiracy to commit economic espionage and theft of trade secrets in violation of 18 U.S.C. §§ 1831(a)(5) and 1832(a)(5), and the substantive counts of economic espionage in violation of 18 U.S.C. § 1831(a)(3) is 15 years and a fine of $500,000, plus restitution if appropriate. The maximum statutory penalty for each substantive count of theft of trade secrets, in violation of 18 U.S.C. 1832(a)(3) is 10 years and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
NetLogic Microsystems, is a computer chip design and development company located in Mountain View, California. Taiwan Semi-Conductor Manufacturing Company is a computer chip manufacturing company with facilities in Taiwan; San Jose, Calif.; Singapore; and Washington state.
An indictment contains only allegations against an individual and, as with all defendants, Mr. Lee and Mr. Ge must be presumed innocent unless and until proven guilty.
Matt Parrella is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Brenda Hodgen. The prosecution is the result of an investigation by Special Agents of the Federal Bureau of Investigation. NetLogics Microsystems and Taiwan Semiconductor Manufacturing Corporation cooperated with the FBI in the investigation.
Further Information: CR 06-00424-JW
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Natalya LaBauve at (415) 436-7055 or by email at Natalya.LaBauve@usdoj.gov.