This post is Part 3 of 5 in which we continue to examine the details of this trade secrets theft enterprise. Please see the following links to read the previous two Parts: Part 1 – Part 2
MANNER AND MEANS
The following is essentially the “Manner and Means” the five defendants used to carry out their crimes as described in the indictment:
The two GSK employees stole GSK trade secrets and would typically do the following:
- Defendant #1 (GSK employee) would e-mail the trade secrets from her work e-mail account to her personal e-mail account
- Defendant #1 then emailed the trade secrets from her personal e-mail account to the personal e-mail accounts of defendants #2, 3, and 4
- Defendant #5 (GSK employee) emailed the stolen information to her husband Defendant #2
And the cycle would repeat itself, over and over again.
In one of many telling email exchanges Defendant #1 (a/k/a “Joyce”) had with her co-conspirator twin sister, the twin sister asked, “…is ok you sent this plan from your company email?” And “Joyce” assured her, “it is ok.”
STOLEN TRADE SECRETS SAMPLES
- GSK powerpoint presentation
- Research paper with GSK letterhead on each page
- The document clearly identified as being GSK information and clearly marked, “CONFIDENTIAL”
- GSK documents with the email instruction from one of the GSK employees, “Please do not spread.”
- GSK powerpoint presentation and training lecture
DEFENDANTS CRIMINAL BUSINESS STRUCTURE
The following is the business structure of the trade secrets theft enterprise as described in the indictment:
Three of the five defendants formed three corporations (one in Delaware–the other two were off-shore entities) to market, sell, and ultimately profit from the stolen GSK information.
HOW WOULD THE DEFENDANTS PROFIT?
The defendants planned to profit in multiple ways:
- They planned to sell the GSK trade secrets as their own research
- They intended to use GSK trade secrets to secure lucrative consulting contracts
- They intended to do additional research to finalize and perfect GSK products still in development
- They intended to patent some GSK products
- They intended to use GSK products to bolster their personal business entities reputation
MONEY LAUNDERING
To hide the profits, Defendant #1 titled her interest in her personal business entity and the proceeds of the crime in the names of family members and other associates.
Here’s a quote from the criminal complaint, “YU XUE (Defendant #1, a/k/a “Joyce”) instructed two of the other defendants to hide the proceeds of the fraud scheme in the name of her twin sister in an attempt to prevent the criminal conduct from being traced back to “Joyce.”
IP PROTECTION OBSERVATION
There were a number of opportunities for a vigorous internal-integrity-monitoring program to pick up on this criminal conspiracy beyond emails traveling from a GSK computer to a personal computer, as we noted in Part 1, but, through the utilization of background screenings.
If annual background screenings were conducted of employees, (especially scientists with access to complex R & D information) an updated background screening would have uncovered the business entity GSK scientist-defendant “Joyce” registered in Delaware to facilitate the criminal enterprise.
IN THE NEXT POST…Part 4…
…we will explore what triggered the FBI investigation and the steps they took to investigate the allegations.
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