Hospitalized DuPont IP Thief Seeks Release Over COVID-19

By Dave Simpson
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Law360 (June 1, 2020, 8:24 PM EDT) -- The first person ever convicted of economic espionage by a federal jury, for stealing manufacturing secrets from DuPont Co. and selling the information to Chinese-owned companies, has asked for early home release, saying he contracted COVID-19 in prison and is on a ventilator.

Former businessperson Walter Liew, 62, said Friday that his age and underlying medical conditions, including high cholesterol and a fatty liver — a precursor to cirrhosis — put him at an elevated risk were he to get the virus again. The motion notes that Liew, who was incarcerated in Lompoc, California, is still waiting on test results to confirm that he did contract the virus.

Liew says he's served just under six years and is due for release in six months. He asked the court to allow him to quarantine for 14 days following his release from the hospital and then to go home to "convalesce" with his family, where, Liew says, he can get a better standard of care than what's offered by the Federal Bureau of Prisons.

"Assuming Mr. Liew is currently positive for COVID-19, there are still more questions than answers about what his recovery will look like and whether Mr. Liew will remain vulnerable to COVID-19 should he be forced to remain at Lompoc with other infected people," he said. "The World Health Organization has concluded that there is 'currently no evidence that people who have recovered from COVID-19 and have antibodies are protected from a second infection.'"

In March 2014, a California federal jury found Liew and his company, USA Performance Technology Inc., guilty of conspiracy to commit economic espionage and possession of trade secrets and found Liew guilty of tampering with witnesses and evidence, filing false tax returns and making false statements in bankruptcy proceedings. Liew was the first person convicted by a federal jury under the Economic Espionage Act of 1996, according to prosecutors.

The conviction for witness tampering was later reversed by the Ninth Circuit, Liew said.

Robert Maegerle, the former DuPont engineer Liew hired to help him secure contracts with Chinese manufacturers, was found guilty of conspiracy to steal trade secrets, conveying trade secrets, attempted trade secrets theft, and tampering with witnesses and evidence.

Liew, who is Chinese American, and his wife, Christina, founded multiple companies in Northern California, including USA Performance, and hired Maegerle as a consultant because he knew the ins and outs of safely producing massive amounts of titanium dioxide, prosecutors told the jury.

Maegerle allegedly shared what he had learned building plants for DuPont with the Liews, who used the information to launch contracts with Chinese companies, including Pangang Group Co. and its subsidiaries, to build titanium-dioxide-making factories in China.

Liew's businesses reaped nearly $28 million from those contracts, $22 million of which he held in Singaporean "shell accounts" to avoid paying taxes on the income, prosecutors said. He also put some of the money into bankruptcy, leading prosecutors to charge him with tax fraud and bankruptcy fraud. When the FBI began investigating, Liew told his wife how to respond, and the couple attempted to hide evidence from investigators, prosecutors said.

On Friday, Liew argued that the BOP has mishandled the outbreak and the Lompoc facility is an epicenter. Liew goes on to say that his situation is "emblematic" of the "ineffective" response at Lompoc.

"Mr. Liew was transferred to a warehouse converted into a makeshift quarantine unit," he said. "He was given a mattress on top of a cot which is exactly 6 feet from the mattresses next to his own. Mr. Liew has had limited access to a toilet or a shower since he was moved to the warehouse."

The government was represented by Richard S. Scott of the U.S. Department of Justice.

Liew is represented by Peter L. Arian.

The case is U.S. v. Liew et al., case number 4:11-cr-00573, in the U.S. District Court for the Northern District of California.

--Editing by Orlando Lorenzo.

For a reprint of this article, please contact reprints@law360.com.

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