Wen Chyu Liu, aka David W. Liou, Former Dow Research Scientist Sentenced to Prison for Stealing Trade Secrets and Perjury

January 13, 2012

A former research scientist was sentenced late yesterday to 60 months in prison for stealing trade secrets from Dow Chemical Company and selling them to companies in the People’s Republic of China, as well as committing perjury.

U.S. District Court Judge James J. Brady also sentenced Wen Chyu Liu, aka David W. Liou, 75, of Houston, to two years of supervised release and ordered him to forfeit $600,000 and pay a $25,000 fine. A federal jury in Baton Rouge, La., convicted Liu on Feb. 7, 2011, of one count of conspiracy to commit trade secret theft and one count of perjury.

According to the evidence presented in court, Liu came to the United States from China for graduate work. He began working for Dow in 1965 and retired in 1992. Dow is a leading producer of the elastomeric polymer, chlorinated polyethylene (CPE). Dow’s Tyrin CPE is used in a number of applications worldwide, such as automotive and industrial hoses, electrical cable jackets and vinyl siding.

While employed at Dow, Liu worked as a research scientist at the company’s Plaquemine, La., facility on various aspects of the development and manufacture of Dow elastomers, including Tyrin CPE. Liu had access to trade secrets and confidential and proprietary information pertaining to Dow’s Tyrin CPE process and product technology. The evidence at trial established that Liu conspired with at least four current and former employees of Dow’s facilities in Plaquemine and Stade, Germany, who had worked in Tyrin CPE production, to misappropriate those trade secrets in an effort to develop and market CPE process design packages to various Chinese companies.

Liu traveled extensively throughout China to market the stolen information, and evidence introduced at trial showed that he paid current and former Dow employees for Dow’s CPE-related material and information. In one instance, Liu bribed a then-employee at the Plaquemine facility with $50,000 in cash to provide Dow’s process manual and other CPE-related information.

In addition, according to evidence presented at trial related to the perjury charge, Liu falsely denied during a deposition that he made arrangements for a co-conspirator to travel to China to meet with representatives of a Chinese company interested in designing and building a new CPE plant. Liu was under oath at the time of the deposition, which was part of a federal civil suit brought by Dow against Liu.

The case is being prosecuted by Assistant U.S. Attorney Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, and former Assistant U.S. Attorney Ian F. Hipwell for the Middle District of Louisiana, as well as Trial Attorney Kendra Ervin of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by the FBI’s New Orleans Division.