Assistant Attorney General Lanny A. Breuer Speaks at Announcement of Charges Against Kolon Industries

Thank you, U.S. Attorney MacBride. For decades, Kevlar and Twaron have been essential to making body armor, fiber optic cables and other critical, industrial products. Developing these materials took hard work. It was resource-intensive, and required strategic investment and ingenuity. Today, as U.S. Attorney MacBride said, we are announcing charges that Kolon Industries, and five of its employees, conspired to steal trade secrets from DuPont and Teijin, in a brazen attempt to profit from that very investment and ingenuity.

The indictment alleges that over a more than six-year period, Kolon conspired to steal trade secrets concerning Kevlar and Twaron so that it could develop a competing product – Heracron.

Kolon and its employees are alleged to have hired, or attempted to hire, current and former employees of DuPont and Teijin as purported “consultants,” and paid them to reveal the companies’ trade secrets. In one instance, described in the indictment, a Kolon executive allegedly told a former DuPont employee that Kolon “need[s] trade secret and proprietary information from you and other people.” In another instance, also described in the indictment, a second Kolon executive allegedly told a current DuPont employee, whom he believed was willing to sell DuPont trade secrets, that, “[T]his kind of conversation must be confidential. . . . [W]e don’t want to leave out some kind of evidence, for example.”

Kolon also allegedly paid certain “consultants” to collect documents describing valuable information related to the manufacture of Kevlar, including information about DuPont’s costs, profit margins, customers and sales prices. One of these “consultants” allegedly described the documents he was providing as “pretty powerful information,” “just a wealth of information” and “everything you could ever want to know about the reaction kinetics.”

By allegedly conspiring to steal DuPont’s and Teijin’s intellectual property, Kolon threatened to undermine an economic engine at both companies. We cannot, and we will not, stand idly by in the face of such flagrant alleged conduct.

The Justice Department has made fighting intellectual property crime a top priority. In 2010, the Attorney General announced the creation of our Task Force on Intellectual Property and, in the Criminal Division, we have been aggressively prosecuting IP crimes all over the country.

Moreover, as this indictment shows, we will not hesitate to charge corporations criminally in appropriate circumstances, in addition to holding individual executives and employees accountable.

I am extremely proud of the prosecutors in my Fraud Section, and my Computer Crime and Intellectual Property Section, and of U.S. Attorney MacBride’s prosecutors here in the Eastern District of Virginia, as well as of the FBI agents who investigated this case.

Thank you. I would now like to turn it over to my colleague from the FBI, Special Agent in Charge Jeffrey Mazanec.