- Key Findings
- Overview of the Threat
- Legal Collection Versus Espionage
- The Cost of Economic Espionage
- Effects of the Economic Espionage
- Origin of the Threat
- Targeted Information and Technology
- Collection Methods
- Espionage and Other Illegal Collection
- Legal Collection Methods
- Appendix/Case Summaries
- Despite the adoption of the Economic Espionage Act of 1996, many
foreign countries, including some traditional US allies, continue
their attempts to acquire US trade secret information and critical
technologies for military and commercial application, through both
legal and illegal means.
- Updated information, as reported by the US Intelligence Community,
reaffirms the findings of the 1997 Annual Report to Congress on Foreign
Economic Collection and Industrial Espionage to include the origin
of the threat, collection targets, and methods of operation.
- Analysis of updated information indicates that eight countries are
most actively targeting US proprietary economic information, trade
secrets, and critical technologies. In an effort to more effectively
qualify the threat, four of the 12 most active collectors listed in
the 1997 Annual Report were taken off the 1998 Priority Country List.
- Collection efforts continue to be driven by military force modernization,
economic competition, and commercial modernization using technologies
with dual-use applications.
- Clandestine collection efforts continue; however, consistent with
traditional espionage operations, a significant majority to foreign
intelligence collection is initially conducted through legal and open
means and may be a precursor to economic espionage.
The Intelligence Authorization
Act for Fiscal Year 1995, Section 809(b) requires that the President
annually submit to Congress updated information on the threat to US industry
from foreign economic collection and industrial espionage. This report
updates the third Annual Report to Congress on Foreign Economic Collection
and Industrial Espionage, which was released in June 1997.
The Intelligence Authorization Act further specifies three aspects
of the threat to US industry to be reported and any trends in that threat
to include (1) the number and identity of the foreign governments conducting
foreign industrial espionage; (2) the industrial sectors and types of
information and technology targeted by such espionage; and (3) the methods
used to conduct such espionage.
In coordinating a community-based response to the above requirement,
the National Counterintelligence Center (NACIC) requested the assistance
of the following 12 agencies:
- Air Force Office of Special Investigations (AFOSI).
- Central Intelligence Agency (CIA).
- Defense Intelligence Agency (DIA).
- Defense Security Service (DSS).
- Department of Commerce.
- US Customs.
- Department of Energy (DOE).
- Department of State.
- Federal Bureau of Investigation (FBI).
- National Security Agency (NSA).
- Naval Criminal Investigative Service (NCIS).
- US Army
Ten of the above agencies responded to the request for information.
Of the 10 participating agencies, three had no new information to report.
The remaining seven agencies provided incidents and trends relating
to the continuing foreign economic collection against the United States.
Strong US capabilities
in a wide variety of cutting edge, technical, and scientific fields, and
the open nature of the United States continue to make the United States
the top target of foreign countries engaged in economic intelligence collection
and espionage. Similarly, the development and production of
trade secret information is an integral part of US trade, commerce, and
business, and the security of trade secrets is essential to maintaining
the health and competitiveness of critical segments of the US economy.
For the most part, foreign collectors do not distinguish between military
technology, civilian technology, proprietary information, and trade
secrets - they simply collect what they find to be of value.
Increasing economic competition has redefined the context for espionage
as nations link their national security to their economic security.
Intelligence services are expanding from their primary focus on military
secrets to include the collection of economic intelligence. The
United States is particularly vulnerable to the changing focus of foreign
collection since American corporations and research centers rely heavily
on communications systems, computer networks, and electronic equipment
to process and store information. The espionage threat is particularly
troubling when the capabilities and experience of a foreign intelligence
service support a US corporation's foreign competitor.
Economic crimes have a serious impact on a wide variety of US industries
and businesses and therefore upon the economic well-being of the United
States. Foreign governments and major foreign industrial sectors
play a prominent role in their nation's business intelligence collection
efforts. They actively target US persons, firms, industries, and
the US Government to steal advanced critical technologies, trade secrets,
proprietary information, and the results of research and development
initiatives in support of their nation's commercial priorities and economic
There have been progressive changes in three areas of foreign collection
efforts targeting US interests:
- Intelligence activity. Intelligence collection activity
is not limited to intelligence personnel. Increasingly, foreign-sponsored,
non-intelligence personnel - to include foreign industry representatives,
students, researchers, scientists, and foreign national "insiders"
working in US firms - engage in clandestine activity that is harmful
to the security and economic well-being of the United States.
- Intelligence environment. Significant advances in technology
have allowed businesses and financial institutions to become prey
of new age of criminals. The intelligence environment now includes
the growing importance of maintaining the integrity of the United
States' information infrastructure. At the same time, the growing
use of computer networks and telecommunications for commerce and the
storage and transmittal of sensitive information provides increased
opportunities for technical collection.
- Intelligence methodology. Many traditional and nontraditional
adversaries are technologically sophisticated and have modified their
intelligence methodologies to use advanced technologies to collect
US trade secrets and proprietary information.
There are no agreed-upon
definitions of economic or industrial espionage. The US Attorney General
defines economic espionage as "the unlawful or clandestine targeting
or acquisition of sensitive financial, trade, or economic policy information,
proprietary economic information, or critical technologies." This
definition excludes the collection of open and legally available information
that constitutes a significant majority of economic collection. Aggressive
intelligence collection that is entirely open and legal may harm US industry
but is not espionage. However, it can help foreign intelligence service
identify information gaps and in some cases may be e precursor to economic
The statute that mandates this report defines industrial espionage
as "industrial espionage conducted by a foreign government or by
a foreign company with direct assistance of a foreign government against
a private US company and aimed at obtaining commercial secrets."
This definition does not extend to activities of private entities without
foreign government involvement, nor does it pertain to lawful efforts
to obtain commercially useful information, for example, through the
Internet. While some of these legal activities may be a precursor to
clandestine collection, it does not constitute industrial espionage.
Some countries have along tradition of ties between government and industry;
however, often it is not easy to determine what is foreign government
- sponsored espionage - a necessary requirement under the Economic Espionage
Act (Title 18 U.S.C., Section 1831).
It is difficult to assess
the dollar loss as a result of economic espionage and the theft of trade
secrets. The US Intelligence Community has not systematically evaluated
the costs. The American Society for Industrial Security (ASIS) conducted
an intellectual property loss survey of Fortune 1,000 companies and 300
fastest growing companies. Despite an overall 12-percent response rate,
responding companies reported $44 billion in known and suspected losses
over a 17-month period during 1996-97.(1) The
vast majority of these losses were in the suspected category.
Pacific Northwest National Laboratory, under contract by the FBI,
has developed a methodology to objectively assess and determine the
scope of economic loss resulting from the theft of intellectual property.
This Economic Loss Model was first applied to the facts of a case involving
the theft of intellectual property from a US corporation by a foreign
competitor who, as a result of the theft, captured the market.(2)
Using this tool, the misappropriation of intellectual property in this
case resulted in over $600 million in lost sales, the direct loss of
2,600 full-time jobs, and a resulting loss of 9,542 jobs for the economy
as a whole over a 14-year time frame. Analysis also determined that
the US trade balance was negatively impacted by $714 million and lost
tax revenues totaled $129 million. The Economic Loss Model will continue
to be used on a case-by-case basis and may be used for court purposed
to produce unbiased and independent loss estimates.
Since the enactment of
the Economic Espionage Act of 1996, US law enforcement has taken advantage
of the changed legal structure to fill many gaps and inadequacies that
formerly existed in federal law. Important partnerships have been formed
between members of the US Intelligence Community, the law enforcement
community and US industry, allowing for prompt detection and successful
Five cases have been, or are currently being prosecuted under the
Economic Espionage Act. US companies that have been the targets of trade
secret theft under the Act include Gillette Company, Pittsburgh Plate
Glass (PPG), Bristol Myers Squibb, Avery Dennison Corporation, and Joy
Mining Machinery. In each case, a significant economic loss was prevented.
To date, four individuals, involved in three cases, have pled guilty
to Title 18 United States Code (U.S.C.), Section 1832 - theft of trade
secrets. (3) However,
no direct foreign government involvement has been proved in any of these
cases. The other two cases involve the indictment of foreign national
and one foreign business. In addition, an outstanding warrant presently
exists for one Taiwan person. Prosecutions are still pending in these
cases and investigation continues to fully determine the extent of foreign
Each indictment and prosecution is a strong example of close cooperation
between the US Federal Government and US industry. In furtherance of
this cooperation, the FBI has undertaken a number of initiatives. The
FBI's National Security Division sponsored a series of six regional
Economic Espionage Conferences. These conferences brought together elements
of US industry and Federal Government criminal and intelligence sectors
that play a role in economic espionage matters. The FBI's Awareness
of National Security Issues and Response Program (ANSIR) is designed
to develop a nationwide communication network among corporate security
professionals, law enforcement, and others on a variety of national
security matters, to include economic espionage. In addition, the FBI
is currently working with industry to develop an online system to facilitate
the timely sharing of information concerning incident reports, threat
profiles, and referrals between industry and the FBI. The FBI has also
initiated efforts to include operative language from the Economic Espionage
Act into the Federal Acquisition Regulation (FAR). The FAR provides
uniform policies and procedures for acquisitions by executive agencies
of the Federal Government.
The Department of Defense Counterintelligence Technology Protection
Working Group was formed through joint efforts of DoD service CI agencies
and the Counterintelligence Directorate, Office of the Secretary of
Defense (OSD). The Working Group's purpose is to foster interagency
cooperation to identify, coordinate, and facilitate the sharing of counterintelligence
information and activities that support technology protection and critical
technologies. The forum facilities the exchange of information on foreign
government intentions, collection capabilities, and operations targeting
US critical technologies, systems and subsystems. The group has attendees
from all DoD elements, OSD, FBI, NSA, National Reconnaissance Office,
NACIC, and other US Government agencies.
A number of
foreign countries, to include some traditional US allies, continue their
collection efforts against the United States. This year, eight countries
have been identified as nations most actively involved in the collection
of US proprietary economic and industrial information.(4)
These countries do not reflect the entire picture of targeting
against US interests - only the most serious threat.
The 1997 Annual Report identified 12 countries, in no ranking
order, that were believed to be the most active collectors of US proprietary
information and critical technologies. The four countries that have
been omitted from this year's list have not ceased their collection
efforts entirely but are believed to pose a diminished threat to US
A threat to US economic and industrial interests entails both intent
and capability. All countries on this year's Priority Country List have
the intent and capability to engage in economic collection and economic
espionage. Hostile intent involves a willingness to effectively conduct
economic espionage against the United States and the capacity to do
so. An effective foreign collection program focuses on technology and
information that can be used by a country's indigenous commercial and
defense industries. In addition, a close relationship between government
and business exists among many of the most active economic collector
countries - a factor that helps to establish targeting priorities and
promote effective dissemination of information. In addition, to have
a sufficient negative effect on US industry, a foreign country must
have the capability to exploit stolen technology and a base for profiting
from it, such as a large economy, an advanced industrial sector, or
a third-country buyer.
Foreign collection efforts
continue to be driven by military force modernization, economic competition,
and commercial modernization using technologies with dual-use applications.
Targeting dual-use technology provides foreign collectors with a high
return on investment and a low probability that the United States will
detect any diversion from it stated end use. A majority of collected information
is restricted, sensitive and/or proprietary and its loss is detrimental
to US economic interests. A smaller portion of collected information is
classified in nature.
According to the DSS, US defense industry reporting of suspicious activity
during 1997 revealed that foreign government and commercially sponsored
entities continued to target weapon components, developing technologies,
and technical information more intensely than complete weapon systems
and military equipment. Less developed countries seek older technologies
that cost less but still improve their military capabilities. More developed
nations appear to seek more advanced technical information to copy or
counter US military systems. A review of reported incidents of suspected
targeting against critical technologies in 1997 has reaffirmed that
all 18 categories of the DoD's Military Critical Technology List (MCTL)
continue to be the subject of foreign interest for military and/or economic
exploitation. The majority of MCTL categories are dual-use and include:
- Aeronautics Systems.
- Armaments and Energetic Materials.
- Chemical and Biological Systems.
- Directed and Kinetic Energy Systems.
- Ground Systems.
- Guidance, Navigation, and Vehicle Control.
- Information Systems.
- Information Warfare.
- Manufacturing and Fabrication.
- Marine Systems.
- Nuclear Systems.
- Power Systems.
- Sensors and Lasers.
- Signature Control.
- Space Systems.
- Weapons Effects and Countermeasures.
Of the 18 technology categories listed on the MCTL, the DSS observed
that the top five most sought-after technologies were (in order): Information
Systems, Aeronautic Systems, Sensors and Lasers, Electronics, Armaments
and Energetic Materials. In the past, DSS has emphasized only the top
three sought-after MCTL categories; however, current reporting has changed
only slightly from 1996 when sensor and laser technology surpassed aeronautics
systems as the secondmost sought-after technology.
Under the five primary technology categories, several more specific
areas of foreign interest in 1997 included:
- Information security systems.
- Transmission systems.
- Modeling and simulation.
- Command, control, communications, computers, and intelligence (C41).
- Intelligence systems.
- Fixed-wing aircraft.
- Gas turbine engines.
- Unmanned aerial vehicles (UAV).
- Heads-up display.
- Aircraft stealth.
- Crew interface.
Sensors and Lasers:
- Focal plane array/infrared.
- Electro-optic/night-vision devices.
- Fabrication equipment.
Armaments and Energetic Materials:
- Advanced artillery munitions.
- Surface-to-air, antiship, and air-to-air missiles.
There has been no visible
change in foreign collection methods. Practitioners of both economic and
industrial collection seldom use one method of collection. Instead, they
combine a number of collection techniques in a concerted effort that combines
legal and illegal, traditional, and more innovative methods. Foreign individuals,
businesses, government entities, and intelligence-affiliated personnel
conducted collection activity during 1997. These foreign interests were
not always government sponsored and demonstrated various levels of suspicious
Consistent with traditional espionage operations, a significant majority
of foreign intelligence collection is initially conducted through legal
and open means and may be a precursor to economic espionage. Foreign
intelligence services and companies rely predominately on HUMINT collection
when operating against US targets in the United States and abroad. Foreign
collectors most likely avoid technical collection inside the United
States because of the legal risks as well as the costs. However, most
modern foreign intelligence and security services are capable of monitoring
telephone, facsimile, and computer transmissions within their own country.
1997 indicate that foreign intelligence services and other government-sponsored
entities continue to employ traditional clandestine espionage methods
to obtain US trade secrets, critical technologies, and even open-source
information. These methods include agent recruitment, US volunteers and
co-optees, surreptitious entry, theft, and computer intrusions. According
the to FBI, there has been a significant increase in its pending computer
In addition to traditional
espionage and other illegal activities, foreign governments, entities,
and agents utilize various legal collection methods to target US economic
and proprietary information that may be open source, proprietary, restricted,
or even classified. As such, these methods do not necessarily involve
illicit or illegal activity. Some of these legal activities may be a precursor
to clandestine or illegal collection; however, they do not of themselves
constitute evidence of illegal activity. Legal collection methods can
include joint ventures, foreign students, scientific exchanges, Internet
access, unsolicited requests for information, cultural targeting, mergers
and acquisitions, and visits to US facilities.
US defense industry reporting of suspicious activity confirms that
throughout 1997, a number of methods were used to collect defense-related
information and technologies. Despite the legitimate nature of these
collection practices, they may be an important element in a broader,
directed intelligence-collection effort. The following collection methods
were associated with potential collection efforts in 1997:
- Unsolicited requests for information.
- Exploitation of foreign US visits.
- Exploitation of joint ventures and research.
- Targeting visitors at international conventions, seminars, and exhibits.
- Acquisition of US technology and/or US companies.
- Solicitation and marketing of services.
- Foreign employees in a cleared facility.
- Targeting former US company employees.
According to US defense industry reporting to the DSS, the following
five collection methods (in order) were most frequently associated with
foreign activity in 1997.
Since DSS began keeping statistics in 1995, reporting of unsolicited
foreign requests for information has tripled. The requests have originated
via e-mail, telephone, facsimile, and mail, and have come from foreign
companies, individuals, government officials, and organizations. The
use of the Internet has become the vehicle of choice for unsolicited
requests as it provides an international, low cost, and anonymous medium
to contact cleared contractor employees. In 1997, DSS saw a resurgence
in the reporting of unsolicited requests for information by restricted
Visits to US Facilities.
Visitors continued to request information beyond the scope of approved
discussions, broker appointments at additional companies or subsidiaries
on short notice, and photograph sensitive production lines. Also reported
with more frequency were the collection efforts by visiting foreign
personnel involved in multinational training efforts. These visitors
requested restricted and/or controlled technologies from their US counterparts.
According to a 1997 General Accounting Office report, thousands of
scientists, researchers, and officials from Russia and China have gained
access to the three US nuclear laboratories without security background
checks. The report cited DOE labs - Lawrence Livermore, Los Alamos,
and Sandia - for lax security. Some of the individuals allowed access
to labs were later shown to have suspected foreign intelligence connections.
The report focused on visits from 1994 - 1996 by citizens of 22 countries
on DOE's "sensitive" country list.(6)
A total of 5,472 visitors from those 22 countries came to DOE labs.
Only 892 visitors, or 16 percent, were given background checks. Visitors
from these sensitive countries gained access to areas where work can
include technologies under government-export restriction, unclassified
but sensitive information, and valuable equipment. Although DOE agreed
with the report's recommendations and is taking extensive steps to improve
security, the Department challenged the notion that background checks
ensure airtight security.
Joint Ventures and Research.
As with foreign national visits, joint efforts place foreign personnel
in proximity to US personnel and afford potential access to S&T programs
and information. A number of reports involved cleared US personnel being
targeted while engaged in joint ventures overseas. There are further
indicators that front companies may be using this method of operation
International Conventions, Seminars, and Exhibits.
During such events, US participants reported possible telephone monitoring
and hotel room intrusions. In addition, US technical experts have received
invitations to share their knowledge in international forums. While
many of these requests are benign, others are an effort to press US
experts for restricted, proprietary, and even classified information.
Solicitation and Marketing of Services.
Consistent with past reporting, foreign individuals with technical backgrounds
offered their services to cleared commercial and government research
facilities, academic institutions, and defense companies. A new trend
in 1997 involved foreign nationals who fabricated past work histories
in an attempt to gain employment with cleared companies in unclassified
positions. In addition, foreign software manufacturers solicited products
to cleared US companies that had been embedded with spawned processes
and multithreaded tasks.
Economic Espionage Act 1996
(Title 18 U.S.C., 1832)
Daniel and Patrick Worthing
Patrick Worthing and his brother Daniel were arrested by the FBI on 7
December 1996, after agreeing to sell Pittsburgh Plate Glass Industries
(PPG) information for $1,000 to an FBI Special Agent posing as a representative
of Owen-Corning. The FBI received information from PPG that an individual
was attempting to sell company trade secrets to representatives of Owens-Corning
Corporation, a primary PPG competitor.
Both subjects were charged under Title 18 U.S.C., Section 1832 (Theft
of Trade Secrets). On 18 April 1997, because of his minimal involvement,
Daniel Worthing was sentenced to six months of home confinement, five
years probation, and 100 hours of community service. In June 1997, Patrick
Worthing, who pled guilty to the charges against him, was sentenced
to 15 months in jail and three years probation.
Hsu Kai-Lo and Chester H. Ho
On 14 June 1997, Hsu Kai-Lo and Chester H. Ho (naturalized US citizens)
were arrested by the FBI for attempting to steal the formula for Taxol,
a cancer drug patented and licensed by the Bristol-Myers Squibb (BMS)
Company. Hsu and Ho were employees of the Yuen Foong Paper Manufacturing
Company of Taiwan. On 19 July 1997, Hsu, Ho, and Jessica Chou (a Taiwan
citizen who was actively involved in the attempted theft) were indicted
on 11 counts. Two of the 11 counts were violations of Title 18 U.S.C.,
Section 1832 (Theft of Trade Secrets). Chou remains in Taiwan. Taiwan
has publicly stated that it will not help the FBI bring Chou to justice
in the United States. This case is in the pretrial stages. The US Department
of Justice (DOJ) has appealed a trial judge's ruling on a key part of
the Economic Espionage Act (Title 18 U.S.C., Section 1835) regarding protective
orders for trade secrets.
This case represents an attempted theft of valuable trade secrets
that could have had significant impact on the US economic position in
the worldwide pharmaceutical market-place. If the Taiwan firm - Yuen
Foong Paper Company - had obtained the synthetic Taxol formula, BMS
would have lost approximately $200 million a year in revenue from the
world market. Over the 10-year period this translates to a potential
loss of $2 billion.
Pin Yen Yang, Hwei Chen Yang, and Four Pillars Company
On 5 September 1997, Pin Yen Yang and his daughter Hwei Chen Yang (a.k.a.
Sally Yang) were arrested on several charges, including Title 18 U.S.C.,
Section 1832 (Theft of Trade Secrets). Also charged is Four Pillars Company,
which has offices in Taiwan and is a registered agent in El Campo, Texas.
It is alleged that Four Pillars Company, Pin Yang (Chairman of Four Pillars),
Hwei Chen Yang, and Dr. Ten Hong Lee were involved in a conspiracy to
illegally transfer sensitive, valuable trade secrets and other proprietary
information from the Avery Dennison Corporation, Pasadena, California,
to Four Pillars in Taiwan. (7)
Dr. Lee, a Taiwan native and US citizen, had been an Avery Dennison
employee since 1986 at the company's Concord, Ohio, facility. Dr. Lee
allegedly received between $150,000 and $160,000 from Four Pillars/Pin
Yen Yang for his involvement in the illegal transfer of Avery Dennision's
proprietary manufacturing information and research data over a period
of approximately eight years. On 1 October 1997, a Federal Grand Jury
returned a 21-count indictment charging Four Pillars, Pin Yen Yang,
and Sally Yang with attempted theft of trade secrets, mail fraud, wire
fraud, money laundering, and receipt of stolen property. They are awaiting
trial. On 1 October 1997, Dr. Lee pled guilty to one count of wire fraud
in exchange for his full cooperation in the US Government's case against
the accused. Economic losses to Avery Dennison are estimated at $50-60
Steven Louis Davis
On 23 January 1998, Steven Louis Davis pled guilty to federal charges
that he stole and disclosed trade secrets concerning a new shaving system
developed by the Gillette Company. Davis was employed by Wright Industries,
a subcontractor of Gillette Company, which had been hired to assist in
the development of the new shaving system. In February and March 1997,
Davis made disclosures of technical drawings to Gillette's competitors
Warner-Lambert Co., Bic, and American Safety Razor Co. The disclosures
were made by facsimile and electronic mail. Although the FBI is aware
that Davis reached out to one foreign-owned company (Bic), it is unclear
if he was successful in disseminating trade secrets overseas. Davis was
arrested on 3 October 1997 and was indicted on counts of Title 18, U.S.C.,
Section 1343 (Wire Fraud) and Title 18 U.S.C., Section 1832 (Theft of
Trade Secrets). On 17 April 1998, Davis was sentenced to two years and
three months in federal prison.
This investigation was based on information received from Joy Mining Machinery,
a global coal mining company that manufactures and repairs technical components
for longwall shearers (equipment that mechanically shears coal from the
face of an underground coal wall). John Fulton approached a Joy employee
in an attempt to purchase schematics for part of the longwall shearer
system. Fulton, a former Joy employee, was currently operating United
Mining Cable, a Joy competitor. The Joy employee became a cooperating
witness in the case.
The cooperating witness made consensually monitored conversations in
which Fulton offered to pay any amount of money for information pertaining
to the chock interface unit of the longwall shearer. On 21 November
1997, Fulton paid the cooperating witness $1,500 for blueprints and
a technical binder both of which were Joy proprietary items. Fulton
was arrested by the FBI after the exchange and was charged with unlawfully
attempting to obtain trade secrets (Title 18 U.S.C., Section 1832).
On 14 April 1998, Fulton pled guilty to one count of theft of trade
secrets. He will be sentenced in September 1998.
Other Theft of Trade Secrets
Harold Worden, a 28-year employee of Eastman Kodak Corporation, established
his own consulting firm upon retirement. Worden subsequently hired many
former Kodak employees and stole a considerable amount of Kodak trade
secret and proprietary information that he later attempted to sell to
Kodak rivals including corporations in the PRC. Worden pled guilty to
one felony count of Title 18 U.S.C., Section 2314 (Interstate Transportation
of Stolen Property). The Economic Espionage Act of 1996 was not
yet signed into law. Worden was sentenced to one-year imprisonment, three
months of home confinement with a monitoring bracelet, three years of
supervised probation, and a $30,000 fine.
This investigation involved unauthorized intrusion into a voice-mail system
by a disgruntled former employee. The victim was Standard Duplicating
Machines Corporation (Standard), whose main competitor was the US affiliate,
Duplo Manufacturing Corporation of Japan (Duplo). John Hebel was employed
by Standard as a field sales manager from 1990 to 1992 when he was terminated.
Hebel was subsequently hired by Duplo. Through an unsolicited phone call
from a customer, Standard discovered that while employed at Duple, Hebel
accessed Standard's electronic phone messaging system and used the information
in Duplo's benefit to compete against Standard.
On 6 November 1996, Hebel was charged with one count of violating Title
18 U.S.C., Section 1343 (Wire Fraud). On 14 March 1997, Hebel was sentenced
to two years probation. In addition, a civil suit was brought against
Duplo by Standard with a final settlement closed to $1 million.
must be noted that this figure represents both domestic industrial theft
and foreign economic espionage. In fact, only a small percentage of the
ASIS reported dollar loss is a result of foreign competitors, foreign
intelligence services, or foreign government-sponsored entities.
Northwest National Laboratory conducted their analysis independent of
US company auditors.
and Patrick Worthing attempted to sell Pittsburgh Plate Glass information
to an FBI undercover agent posing as a representative of Owens-Corning.
Steven Davis stole and disclosed Gillette Company trade secrets to several
Gillette competitors. John Fulton attempted to purchase proprietary,
technical information from a cooperating witness employed at Joy Mining
Machinery. All four have pled guilty to theft of trade secrets. See
appendix for further case details.
CI agencies provided NACIC with compilations of incidents and trends
that appeared to involve the targeting of US economic and industrial
information during the past year. NACIC, as coordinator, compiled a
master list of countries assessed to be most aggressively collecting
against US interests. Because of each CI agency's differing mission,
investigative responsibilities, and reporting criteria, one agency's
list of foreign collectors could differ from that of another. NACIC's
analytic effort in compiling a master list sought to ensure the integrity
of submitted data and consistency with the assessment criteria.
countries are those that normally do not do business with the United
States or have embargoes placed on them.
Sensitive Country List includes Algeria, Armenia, Azerbaijan, Belarus,
China, Cuba, Georgia, India, Iran, Iraq, Israel, Kazakhstan, Kyrgyzstan,
Libya, Moldova, Pakistan, Russia, Syria, Taiwan, Turkmenistan, Ukraine,
Dennision Corporation is one of the largest manufacturers of adhesive
products with more than 16,000 employees worldwide.