According to the Department of Justice (DOJ), a Chinese-Swiss man was convicted following a trial for his role in a family conspiracy to steal trade secrets relating to cancer drugs.
Xue Gongda, a permanent resident of Switzerland with Chinese citizenship, was convicted on May 2 for his role in a $10 billion plan to steal cancer drugs from his employer and rebrand them under his own biomedical company, according to US Attorney Jennifer Williams.
Xue worked as a scientist with the Friedrich Miescher Institute for Biomedical Research (FMI) in Switzerland, which is affiliated with Novartis, according to a DOJ statement. In the meantime, his sister, Xue Yu, worked as a scientist at GlaxoSmithKline (GSK) in Pennsylvania.
“This defendant illegally stole trade secrets to benefit companies controlled by himself and his sister, one of which were financed by the Chinese government,” Williams said.
“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 disincentivizes research and development. Such criminal behavior must be prosecuted to the fullest extent of the law.”
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According to the DOJ, both Gongda and Yu conducted confidential cancer research for their prospective companies and signed confidentiality agreements as part of their employment. Gongda did research for journals, while his sister Yu did research for anti-cancer medications that were being developed at the time.
Gongda and Yu shared confidential information for their own personal gain while working for their respective companies, prosecutors said, stealing and sending their companies’ information back and forth and creating new biopharmaceutical companies through which they could sell proprietary drugs under new names. Yu founded Renopharma in China, whereas Gongda founded Abba Therapeutics in Switzerland. Renopharma was even funded directly by the Chinese Communist Party.
According to the DOJ, Renopharma’s internal estimations revealed that the firm could be valued up to $10 billion based on the stolen GSK data.
Gongda was accused in 2018 and extradited to the United States from Switzerland in December 2019. Yu and her Renopharama associates were arrested by the FBI in January.
Yu and GSK colleague Lucy Xi both pleaded guilty to theft of trade secrets. Xue Tian, another sister, pled guilty to a scheme to launder the considerable ill-gotten money that Renopharma was expecting. Renopharma’s Li Tao, one of the company’s directors, also pled guilty to conspiring to steal GSK trade secrets. According to the DOJ, Renopharma’s other director, Mei Yan, is a fugitive who is now residing in mainland China.
“When a company like GSK spends billions on research and development to bring new drugs to market, the theft of valuable trade secrets poses a significant operational threat,” said Jacqueline Maguire, an FBI agent associated with the case. “When those secrets are stolen on behalf of a global adversary, it also endangers the security of our nation and the stability of our economy.”
“The FBI will continue to bring all our investigative resources to bear to hold accountable criminals like Xue and his codefendants who steal intellectual property to benefit themselves and the Government of China. Our relationships with private sector partners like GSK are critical to disrupting such costly activity and bringing those responsible to justice.”