Former Chemours Employee Pleads Guilty To Theft Of Trade Secrets Conspiracy In Bid To Lure Chinese Investors Into Sodium Cyanide Market
WILMINGTON, Del. – United States Attorney David C. Weiss announced today that Jerry Jindong Xu, a citizen of Canada, pled guilty on June 8 to one count of conspiracy to steal trade secrets before the Honorable Leonard P. Stark of the U.S. District Court of Delaware.
According to court documents, the conspiracy involved the theft of trade secrets related to sodium cyanide, a chemical most often used to mine gold, silver, and other precious metals. The Chemours Company (Chemours) is the world’s largest producer of sodium cyanide. Chemours, formed in July of 2015 after the DuPont Corporation separated its performance chemicals business, is based in Wilmington and performs the research and development for sodium cyanide products at its nearby Experimental Station.
From 2011 to June 2016, the defendant was employed in Chemours’ Ontario, Canada office, where he marketed various sodium cyanide-based products developed in the United States to the Canadian mining market. The defendant previously worked for seven years in China for the DuPont Corporation, where he cultivated extensive ties to the Chinese cyanide and mining industry. The defendant was arrested in New York in August 2017 and arraigned in Wilmington on September 28, 2017. At the time of his arrest, the Royal Canadian Mounted Police executed a search warrant on behalf of the United States pursuant to our government’s Mutual Legal Assistance Treaty with Canada.
The defendant admitted that during his final year of employment with Chemours, he systematically acquired – through surreptitious action, false statements to colleagues, and sometimes through his legitimate employment duties – dozens of confidential files, many of which included trade secret information about Chemours’ sodium cyanide business. During this same time, the defendant secretly established a side company, called Xtrachemical, whose purpose was to solicit Chinese-based investors to build a sodium cyanide plant in Canada – in direct competition with Chemours.
To accomplish this illicit goal, the defendant (1) misled his colleagues and fabricated assignments in order to accumulate vast amounts of pricing and other information, including obtaining passwords for spreadsheets; (2) used various personal email accounts to transfer confidential and trade secret information to himself and others; (3) used an encrypted Chinese-based messaging service to communicate with his co-conspirators; (4) asked for and received a tour of Chemours’ primary sodium cyanide manufacturing plant, during which he secretly took pictures of plant system diagrams and sent them to himself; (5) explained to one Chinese investor that he wanted to do this illicit project “for himself and not to slave away at this only to benefit someone else”; (6) accessed Chemours documents during a 2016 trip to China, and asked his co-conspirator how much their plant project would be worth, “Would you say in the millions?”; and (7) received a communication from a Chinese investor who indicated that it is common practice in China to steal the technology from others, design the layout, and get the plan stamped by a design institute.
The defendant is currently being detained until sentencing. The maximum punishment for conspiracy to commit theft of trade secrets, is ten years imprisonment and up to three years of supervised release. No date for the sentencing hearing has been scheduled.
“U.S. companies, like Chemours, invest millions of dollars to develop proprietary products and technologies. The theft of these trade secrets so that investors from other countries, like China, can gain an unfair advantage is unacceptable. We will use every tool at our disposal to identify and prosecute those responsible for these crimes. I want to thank the FBI and the Royal Canadian Mounted Police for their extraordinary work in this investigation,” said U.S. Attorney Weiss.
FBI Special Agent-in-Charge Johnson said, "The theft of trade secrets negatively impacts individual companies and our economy and for this reason, the FBI will continue to aggressively investigate these activities."
The case is being prosecuted by Assistant U.S. Attorneys Jamie M. McCall and Alexander Mackler. Trial Attorney Alex Kalim, from the Criminal Division’s Office of International Affairs, provided significant support in this matter.