This cybercrime case received national attention because of the severity of the criminal’s actions.  Systems engineer, computer systems analyst, and 3D graphics application senior engineer, Xioadong Sheldon Meng, threatened American security when he was caught and indicted on 36 felony counts for stealing military application trade secrets.  Meng illegally took the data in order to sell them to the People Republic of China, Thailand Air Force, and the Malaysian Air Force.  Meng, whose previous employer was Quantum3D, a software company based in Silicon Valley, California, stole from the company hoping the illegally taken products would help benefit the aforementioned foreign governments.

After surreptitiously acquiring the data, Meng left Quantum3D for a career at a competing company, Orad.  While there, he altered the stolen information to his own benefit and presented them as his own in demonstrations and sale proposals to the Asian air forces.

Because many of Quantum3D’s products were developed primarily for military purposes, including military combat training in simulated real-time conditions during the day and night and the use of advanced infrared and other devices,  this case is vitally important to the welfare of the United States.  According to US attorney Kevin Ryan, “The alleged economic espionage and theft and export of trade secrets…has real consequences that could jeopardize our country's military advantages in the world, in addition to creating substantial financial losses for our businesses which legitimately developed and owned this information” ( 

In August of 2007, Xioadong Sheldon Meng was convicted of several crimes including attempted economic espionage, conspiracy, and misappropriation of trade secrets.


Economic benefit. Netgear, a company that sells computer networking products, was a client of both the Broadcom Corporation and Marvell Semiconductor, Inc. and bought from them specified chips for use in their own broadband communications devices. While at Netgear, Suiban Zhang was given access to trade secret data about its products on a customer website created by Marvell. After five years of working for the communications company, Suiban decided to try and further his career by accepting a job at Netgear’s partner company, Broadcom. However, before leaving his position, Mr. Zhang decided to break the law and download dozens of trade secret information filled files from the Marvell website regarding many of Marvell’s products.

Shortly after commencing work with his new employer (Broadcom Corporation), Suiban Zhang loaded the stolen data onto a work computer and emailed the files’ contents to other employees within the company.

Suiban was later charged in a “nine count indictment alleging computer fraud; theft and unauthorized downloading of trade secrets; and the unauthorized copying, transmission and possession of trade secrets” (



Jack Shearer, founder and owner of the energy companies, Tejas Compressor Systems, Inc., Tejas Procurement Services, Inc. and Procurement Services International, violated the Economic Espionage Act by stealing trade secret information from a rival competitor in order to help build his $8 million corporation.  Before forming his own competing corporation, Mr. Shearer worked for San Diego-based Solar Turbines, Inc., a company that designs and develops industrial gas turbine engines and other systems for the production of crude oil and similar products.  Solar Turbines, Inc. is an “owned subsidiary of Caterpillar, Inc., the largest manufacturer of construction and mining equipment, diesel and natural gas and industrial gas turbines”( 

After working for Solar, Shearer created his Tejas energy companies as a way to compete with his former employer.  In a way to try and stay ahead of Solar, Shearer paid three men more than $100,000 to obtain trade secret information from his former employer to help him compete.  This information contained “Solar drawings, plans and schematics describing the dimensions and manufacturing details of Solar parts” (  An employee of Shearer’s remembers his boss instructing his employees to “remove warnings stating the plans were owned by Solar before transferring them to third-party machine shops where counterfeits were made” (

After pleading guilty to the above crimes and violations, the court ordered Jack Shearer to a 54 month prison term and demanded that he pay $7,655,155.00 in restitution bills. The three men who helped Jack Shearer obtain the non-disclosed information were sentenced to lesser prison terms and ordered to compensate for the stolen data monetarily as well. 


Kenneth Branch and William Erskine, former managers of Boeing’s Evolved Expendable Launch Vehicle (EELV) program, were charged with conspiring to steal trade secrets from Lockheed Martin pertaining to a rocket program being developed for the United States Air Force. 

In 1997, the US Air Force was very interested in the EELV programs of both Lockheed Martin and Boeing and decided to grant each corporation with $500 million to help develop the respective programs.  With these two companies competing with each other to develop and finish their EELV prototypes for Air Force approval, Kenneth Branch, who had previously worked for Lockheed, decided to bring documents he used while he worked with his former employer into the mix. 

In 1999, Branch went to Boeing looking for a position within the company’s rocket program.  According details later revealed in court, during “his first job interview with his  future boss Bill Erskine, Branch displayed samples of proprietary Lockheed data and hinted he could provide more if he got a job”.  When other Boeing employees discovered this, they immediately told their competitor and the Air Force that they had found a total of seven pages of Lockheed information is Branch and Erskine’s possession.

However, it was discovered a few years later that Boeing had initially lied about the amount of documents Branch had taken from Lockheed Martin.  After an investigation by the Air Force, the number of papers drastically rose from seven pages to 25,000.

As a result of this discovery, in 2003, the Pentagon suspended Boeing’s rocket launch program.  Kenneth Branch and William Erskine were both in violation of the Economic Espionage Act and are each facing single federal counts of conspiracy to conceal and possess trade secrets.


A hacker that works from the outside “includes individuals or corporations that steal trade secrets for their own use or to sell to a third party.” (, ). United States Department of Justice. 17 April, 2008. Computer Crime and Intellectual Property Section. Economic Espionage Act (EEA) Cases. .


John Berenson Morris of Mt. Kisco, New York was an ex-employee of Brookwood Companies, Inc., a textile company based in New York, New York.  Working as an outside hacker, he attempted to steal and sell, for his own benefit, proprietary pricing information for $100,000 to one of its competitors, W.L. Gore & Associates, Inc.  The information was related to an outstanding multi-million dollar bid from the U.S. Department of Defense to produce military fabric products (, ).

If Mr. Morris had been successful in selling the proprietary pricing information to one of Brookwood’s competitors, it could have meant the downfall of the company economically.  Under the Economic Espionage Act of 1996, the theft of trade secrets is a Federal criminal offense.  Mr. Morris could face up to ten years imprisonment and a fine of up to $250,000 on this charge.


Robert R. Keppel a resident of Vancouver, Washington began selling Microsoft Certified System Engineer (MCSE) and Microsoft Certified Solution Developer (MCSD) exams and answers via the Internet websites and When Mr. Keppel attempted to sell, for his personal gain, and distribute his cheat sheet information that contained answers to the exams; he did violate Microsoft’s copyright of their proprietary information

When the exams are given, the test-taker sees two separate banners before the exam begins.  The banner is an agreement to the terms of the test material, which also includes an agreement not to copy or release the test materials to others.  Based on this agreement, Microsoft does not allow the test materials to be outside of the locations giving the exam. It can cost Microsoft up to $100,000 to develop each test (, ).  

Mr. Keppel was sentenced to twelve months and one day in prison and ordered to pay Microsoft $500,000 in restitution, plus he was ordered to forfeit two vehicles, a Lexus RX300 and a Ferrari 355 Spider, that he had purchased with proceeds from selling the practice exams and the stolen questions (     

It is important that everyone understand that web sites that offer illegally obtained inside information are also unethical and in violation of the Economic Espionage Act.  It also presents a danger to businesses who may potentially hire individuals who claim that they have the correct certifications and possess the skills and knowledge to administer products.


On July 10, 1997, Kai-Lo Hsu, Chester S. Ho, and Jessica Chou were charged with their involvement in an alleged conspiracy to steal corporate trade secrets from Bristol-Myers Squibb. Their involvement included:  seeking to obtain the processes, methods, and formulas for manufacturing Taxol, an anti-cancer drug produced by Bristol-Myers and regarded by the company as a highly valuable trade secret.  (Dratler Jr., ).

Hsu was the paper company's Technical Director.  He and Jessica Chou, met with John Hartmann in Los Angeles, where Hsu asked him to help bribe Bristol-Meyer employees for information on Taxol. Hsu sent Hartmann an e-mail offering $ 400,000 in cash, stock, and royalties in exchange for listed information about "core technology" relating to Taxol, including detailed information on the drug's commercial production processes. (Dratler Jr., ).

At a planned meeting, "detailed discussions regarding the manufacturing processes for Taxol" and that copies of Bristol-Myers documents, marked with Bristol-Meyers' identification and stamped "CONFIDENTIAL" in block type, were shown and discussed.”(Dratler Jr., ). 

“The defendants were arrested and charged with the attempted receipt and/or possession of a trade secret and conspiracy to receive or possess a trade secret under § 1832(a)(4) and (5).” (Hornick and Levy, ).

Because the above defendants were indicted for the actual theft of trade secrets from Bristol-Meyers and cooperating with the government by sharing trade secret information the actual secrecy of the information from the company could be potentially endangered by more individuals knowing it.  The secrecy of the information from the company could be compromised by allowing the viewing of the information in the court room.  Companies need to protect themselves from outside hackers by educating their employees on how to protect proprietary information and need to alert them to the EEA of 1996. 


A hacker working on the inside as an employee commits the “Crime and arrest occurred while defendant was employed by the victim.” (, ). “Innovation, a significant factor in economic growth, requires a substantial investment of time, money and human resources. If companies lose valuable secrets to industrial espionage, they cannot profit by utilizing their competitive advantage. In turn, if they are unable to recoup their investments in research and development, they lose their motivation to innovate and bring new products or services to consumers. The consequences include higher prices charged to consumers, as well as a decrease in new technologies, creative inventions, and improvements. Furthermore, the very concept of privacy "is threatened when industrial espionage is condoned or is made profitable." (, ).


Mr. Say Lye Ow was sentenced to 24 months in prison with a term of supervision for two years following his prison sentence for copying a trade secret following his guilty plea on September 14, 2001. Mr. Ow copied computer files relating to the design and testing of the Merced microprocessor (now known as the Itanium microprocessor). He knew that the materials contained trade secrets belonging to Intel Corporation and that in stealing their trade secrets could harm the business economically, because he worked as a former employee of Intel and possessed Intel’s extremely valuable trade secret information without the company’s knowledge. He copied the trade secret information with intent to convert it to his own economic benefit by using it at his new place of employment at Sun Microsystems. “He also agreed that the information he copied was in fact a trade secret and that it was related to a product that was produced for and later placed in interstate and foreign commerce. The Itanium microprocessor was under joint development by Intel and Hewlett-Packard Co. since 1994.” (, ).


On March 2, 2001, Jolene Neat-Rector was sentenced to 14 months in prison and two years of probation following her release; she was also charged a special assessment of $200 and the fine was waived in her case.  Snyder was sentenced to 10 months in prison, a special assessment of $200, and the fine was also waived in his case.  They were convicted of conspiring to convey trade secrets.

During the month of August 1999, Jolene obtained numerous pieces of proprietary information that was owned by R.P Scherer, Inc. (RPS).  The information included:  gel formulas, fill formulas, shell weights, and experimental production order (EPO) data.  RPS is a leading international developer and manufacturer of:  drug, supplement, cosmetic, and recreational product delivery systems.  RPS’s proprietary advanced drug delivery systems improve the efficacy of drugs by regulating their dosage, rate of absorption and place of release. RPS customers include global and regional manufacturers of prescription and over-the-counter pharmaceutical products, nutritional supplements, cosmetics and recreational products such as paint balls. RPS products are produced for and placed in interstate and foreign commerce. (, ).


On April 29, 1999 Mr. Yang, his corporation Four Pillars Enterprise Company, LTD, and his daughter Hwei Chen Yang, were charged with the attempted theft of a trade secret and conspiracy to commit theft of a trade secret.  (, ).

Mr. Yang owned Four Pillars, a Taiwanese company.  Avery Dennison, Inc. is an American corporation and is one of Four Pillars’ competitors in the manufacture of adhesives.  Dr. Victor Lee, was employed by Avery in 1986 to do scientific research with adhesives.  Mr.Yang met Dr. Lee and asked him to be a consultant to Four Pillars for one year and offered to pay him $25,000.  Dr. Lee told Mr. Yang that some of the information he intended to provide him with was confidential information from Avery.

Dr. Lee continued to supply the Yangs with confidential information including information that Four Pillars could use in making a new acrylic adhesive developed by Avery. The Yangs sent Lee samples of the adhesives they had created using information he had supplied; Lee tested the samples and offered comparisons with Avery's products derived from the same adhesive formula. The FBI confronted Lee after learning of Lee's industrial espionage. Lee admitted his relationship with the Yangs and Four Pillars and agreed to cooperate with the Government in a sting operation to arrest and prosecute the Yangs (, ).

Works Cited  17 April, 2008.  “The Economic Espionage Act of 1996: are we finally taking corporate spies seriously?”  Houston Journal of International Law Fall, 1999.  <>.

United States Department of Justice.  17 April, 2008.  Computer Crime and Intellectual

Property Section.  Economic Espionage Act (EEA) Cases. 



 United States Department of Justice.  15 April, 2008.  Computer Crime and Intellectual

Property Section.  Economic Espionage Act (EEA) Cases. 



Hornick, John F. and Levy, Louis J.  “The Impact of the Economic Espionage Act of
1996.”  17 April, 2008. 

Dratler Jr., Jay (2006).  16 April, 2008.  United States V. Hsu (EEA 1996).

United States Department of Justice.  17 April, 2008.  Computer Crime and Intellectual

Property Section.  Economic Espionage Act (EEA) Cases. 



United States Department of Justice.  17 April, 2008.  Computer Crime and Intellectual

Property Section.  Economic Espionage Act (EEA) Cases.