A scientist from Pennsylvania pleaded guilty to stealing trade secrets for a Chinese pharmaceutical company after forming a fraudulent cancer research and drug company to store stolen information.
According to the Eastern District of Pennsylvania, Lucy Xi, 44, of Malvern, Pennsylvania, pleaded guilty to stealing trade secrets from GlaxoSmithKline (GSK), a large multinational pharmaceutical company, and giving the secrets to Renopharma, a Chinese pharmaceutical company.
“This defendant illegally stole trade secrets to benefit her husband’s company, which was financed by the Chinese government,” U.S. Attorney Jennifer Williams said. “The lifeblood of companies like GSK is its intellectual property.”
She added that this kind of theft not only damaged the strategic benefit of American research, but that it also harmed American workers.
“[When] that property is stolen and transferred to a foreign country, it threatens thousands of American jobs and jeopardizes the strategic benefits brought about through research and development. Such criminal behavior must be prosecuted to the fullest extent of the law,” Williams noted.
Lucy Xi was aided in the conspiracy by Yu Xue, Tian Xue, and Tao Li, who have all pleaded guilty. Another alleged conspirator, Yan Mei, is currently in China as a fugitive.
Back in 2015, Lucy Xi sent out an email containing confidential data from GlaxoSmithKline pertaining to monoclonal antibodies and other related research. In the email to Yu Xue, her husband, she said: “You need to understand it very well. It will help you in your future business [RENOPHARMA].”
The fake entity they created, Renopharma, was given money by the Chinese government. Lucy Xi and her colleagues stole the research from the GlaxoSmithKline lab that they worked at in Upper Merion, Pennsylvania. According to authorities, normally about $1 billion is spent in working on the pharmaceutical products.
“Pharmaceutical firms like GSK invest staggering amounts of time and money to develop new medications and bring them to market,” said FBI Special Agent Jacqueline Maguire. “When individuals steal valuable trade secrets concerning one of these drugs, it’s a threat both to that firm and beyond. After all, innovation like this propels the U.S. economy.”
Maguire added that the FBI was focused on cracking down on theft of U.S. products and research.
“The FBI is committed to enforcing laws that protect the nation’s businesses from such theft. We will not permit American research and development to be scavenged for the benefit of other companies or countries,” she said.
The Intellectual Property Commission, first founded in 2012, is a bipartisan organization that looks to research and provide recommendations on protecting American intellectual property. In March of 2021, it released updated recommendations where it identified China as “the largest origin of IP theft.”
One of the goals of the commission was to:
Better inform U.S. businesses regarding threats of IP theft abroad. It is essential to identify, punish, and publicize bad actors, on both a country and company basis.
• Create a multinational registry to share information on bad actors.
• Deny bad actors access to the U.S. market if they have a record of stealing IP.
The guidance also noted that it would be devoting time to looking at issues pertaining to the global supply chain, changing digital environment, and a U.S.-China trade agreement.