Dr. Xiaorong You, Trade Secret Theft, Tennessee 2022

A Tennessee court has dealt a crushing blow to a former Ph.D. chemist who stole valuable trade secrets from major chemical and coating companies.

Dr. Xiaorong You, 59, of Lansing, Michigan, was sentenced to 168 months in prison by the Honorable J. Ronnie Greer, U.S. District Judge in the United States District Court for the Eastern District of Tennessee, on May 9, 2022.

According to court documents and evidence presented at trial, You stole valuable trade secrets related to formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans. She was granted access to the trade secrets while working at The Coca-Cola Company in Atlanta, Georgia, and Eastman Chemical Company in Kingsport, Tennessee. The stolen trade secrets belonged to major chemical and coating companies, including Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem, Sherwin Williams, and Eastman Chemical Company, and cost nearly $120,000,000 to develop.

You stole the trade secrets to set up a new BPA-free coating company in China. You and her Chinese corporate partner, Weihai Jinhong Group received millions of dollars in Chinese government grants to support the new company. Documents and other evidence presented at trial, showed You’s intent to benefit not only Weihai Jinhong Group, but also the governments of China, the Chinese province of Shandong, and the Chinese city of Weihai, as well as her intent to benefit the Chinese Communist Party.

The sentence also includes three years of supervised release and a $200,000 fine. Until recently, BPA was used universally to coat the inside of cans and other food and beverage containers to help minimize flavor loss and prevent the container from corroding or reacting with the food or beverage contained therein. However, due to BPA’s potential health risks, companies began searching for BPA-free alternatives. As witnesses from the chemical and coating companies testified at trial, developing these BPA-free alternatives was a very complex, expensive and time-consuming process.

Evidence presented at trial showed that from December 2012 through Aug. 31, 2017, You was employed as Principal Engineer for Global Research at Coca-Cola, which had agreements with numerous companies to conduct research and development, testing, analysis, and review of various BPA-free technologies. Because of You’s extensive education and experience with BPA and BPA-free coating technologies, she was one of a limited number of Coca-Cola employees with access to BPA-free trade secrets belonging to Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem, and Sherwin Williams. From approximately September 2017 through June 2018, You was employed as a packaging application development manager for Eastman Chemical Company in Kingsport, Tennessee, where she was one of a limited number of employees with access to trade secrets belonging to Eastman.

Assistant Attorney General Matthew G. Olsen of the National Security Division said, “As the evidence at trial showed, the defendant stole valuable trade secrets and intended to use them to benefit not only a foreign company, but also the government of China,” said Olsen. “Today’s sentence reflects the seriousness of this offense, as well as the Department of Justice’s commitment to protect our nation’s security by investigating and prosecuting those who steal U.S. companies’ intellectual property.”

MORE FEDERAL CRIME NEWS

White Collar Crime

Federal Fugitive Caught Cold: 173,000 Embezzled in Chicago Subtreasury

Sep 15, 1910

White Collar Crime

Rivera Aparicio, Healthcare Fraud, Florida 2019

Jan 15, 2019

White Collar Crime

Devincente Olguin, Wire Fraud, Virginia 2012

Jan 15, 2012

White Collar Crime

Martin Thornley Elze, Woolly Mammoth Tusk Theft, Alaska 2018

Apr 11, 2019