A former scientist who used to work at GlaxoSmithKline (GSK) has pleaded guilty to stealing trade secrets from the company. Lucy Xi, 44 years old, aimed to transfer the trade secrets to a pharma company called Renopharma that has received funds from the Chinese communist regime.
According to a press release from the U.S. Department of Justice (DoJ), Renopharma was established by Yu Xue, Tao Li, and Yan Mei to research and develop anti-cancer drugs. The company was located in Nanjing, China. They are all co-defendants in the case. Like Xi, the three individuals were also employed at GSK, working at the company’s facility in Upper Merion, Pennsylvania.
In 2015, Lucy Xi sent a confidential document from GSK to Yan Mei, who is also her husband. The document contained secret trade data and other information that provided a summary of the company’s research into monoclonal antibodies. In an email, Xi told her husband that he needs to “understand it very well” since it will help him in his “future business,” referring to Renopharma. This document is the basis of Xi’s plea to a single count in her indictment.
Following an FBI probe into the matter, Tao Li and Yu Xue have both pleaded guilty for their roles in the crime. Yan Mei fled back to communist China, out of the DoJ’s reach.
“This defendant (Xi) illegally stole trade secrets to benefit her husband’s company, which was financed by the Chinese government… The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of American jobs and jeopardizes the strategic benefits brought about through research and development. Such criminal behavior must be prosecuted to the fullest extent of the law,” U.S. Attorney Williams said in a statement.
Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division, said that big pharma companies like GSK invest “staggering amounts of time and money” to develop new drugs and bring them to the market. When someone steals trade secrets from such companies, the criminal threatens both “the firm and beyond’ since an innovation like this “propels” the American economy.
“The FBI is committed to enforcing laws that protect the nation’s businesses from such theft. We will not permit American research and development to be scavenged for the benefit of other companies or countries,” Maguire said.
Chinese theft of American intellectual property and trade secrets causes massive damage to the U.S. economy. IP violations by communist China are estimated to cost America around $225 billion to $600 billion annually. A 2019 survey by CNBC found that 20 percent of companies based in North America reported that their IPs were stolen the previous year.
To deal with the issue, the Trump administration entered into a Phase One trade agreement with China in Jan. 2020 in which IP protection was made a key focus point. In February that year, FBI Director Christopher Wray revealed that his bureau had opened 1,000 cases investigating Chinese theft of American technology. He had warned that Beijing was seeking to steal U.S. tech by “any means necessary.”