Ex-Dow worker charged in trade-secret probe

By Frank Esposito.

Midland, Michigan -- US authorities have arrested a former Dow Chemical Co. employee and charged him with attempting to sell stolen plastics-related trade secrets to Chinese companies.

Wen Shyu Liu - also known as David Liou - was arrested 22 Aug on an intercontinental flight inbound to Seattle from Taipei, Taiwan.

Liu, age 69, worked in Dow's research and development area for 27 years before retiring in 1992, according to an 23 Aug statement from the US Attorney's Office for the Middle District of Louisiana.

Most of Liu's career with Dow was spent at the company's petrochemicals plant in Plaquemine, Louisiana.

The secrets Liu allegedly was trying to sell were connected to Dow's Tyrin-brand chlorinated polyethylene business.

Tyrin is primarily used as an impact modifier in vinyl siding and PVC pipe, as well as general rubber applications.

Officials allege that Liu not only took confidential information with him when he left Dow, but that he later hired current and former Dow employees to prepare a detailed engineering package to sell to prospective Chinese companies.

Liu has been charged with 15 counts, including eight counts of wire fraud.

If convicted, he could face a total of 300 years in jail and a maximum fine of $9.75 million (€7.63 million).

Former Dow employees John Wheeler, Keith Stoecker and a person identified only as “HM” are named in the indictment against Liu, although none have been charged.

Stoecker worked at Dow's Plaquemine plant as a chemical engineer from 1988-1999.

Wheeler retired from Dow in 1994. He had helped to design and build Dow's Tyrin plants in Plaquemine and in Stade, Germany.

HM is a German citizen who retired from Dow in 1997 after extensive work at the Stade plant.

US Attorney David Dugas said Liu was indicted in March 2005, but had been out of the country traveling in Canada, China and Taiwan.

Liu made a court appearance in Seattle before being transported to Houston for medical treatment. After receiving medical treatment, he must report for probationary and pretrial scheduling.

Authorities did not believe Liu ever actually sold the Dow Tyrin information to any Chinese firm, Dugas said.

Liu did, however, receive eight payments in 1998 and 1999 totaling $400 000 from Chinese companies. The payments - ranging from $19 000 to $78 000 - were sent from the Bank of China through a Hong Kong business operated by one of Liu's relatives.

Authorities were unsure when Liu allegedly began trying to sell the Dow information. The last recorded incident of such an attempt was in late 2001.

Dow officials declined to comment on the case, according to spokesman Chris Grams.

Dugas said Dow filed a civil suit against Liu in 2001, and two of the charges facing Liu stem from alleged perjury in that case.

From Plastics News (A Crain publication)