SAN FRANCISCO (AP) — Federal prosecutors have charged six Chinese nationals, including three who earned advanced degrees from the University of Southern California, with stealing wireless technology from a pair of U.S. companies.
Hao Zhang, Wei Pang and Huisui Zhang met at the university and conspired to steal technology from Skyworks Solutions Inc. and Avago Technologies soon after graduating in 2006, federal prosecutors said. Both companies are publicly traded chip suppliers for Apple's iPhones and manufacture other communications-related products.
A 32-page indictment charging the six with economic espionage and trade secret theft was unsealed after Hao Zhang was arrested Saturday at Los Angeles International Airport after arriving from China to attend a scientific conference. The five others are believed to be in China.
Federal officials say foreign governments' theft of U.S. technology is one of the biggest threats to the country's economy and national security. They are particularly concerned with China.
State Department spokesman Jeff Rathke said the U.S. government takes "economic espionage" very seriously.
"This case demonstrates that the U.S. is committed to protecting U.S. companies' trade secrets and their proprietary business information from theft. This is an important issue for the United States," he told reporters in Washington on Tuesday.
A spokesperson at the Chinese Embassy in Washington did not immediately respond to a request for comment. The Chinese consulate in San Francisco was unaware of the indictment and declined to comment.
The indictment alleges that the three USC alums began plotting in late 2006 to steal trade secrets from the U.S. companies where Hao Zhang and Wei Pang worked.
Months after their 2006 graduation, Wei Pang sent an email to China discussing the trio's plan to use purloined U.S. trade secrets to set up a factory in China to manufacture technology that eliminates interference from wireless communications, according to the indictment. Wei Pang boasted in the same email that the technology is worth $1 billion a year in the phone market alone, according to the indictment.
The indictment alleges that the men stole "recipes, source code, specifications, presentations, design layouts and other documents marked as confidential."
Hao Zhang made a brief court appearance Monday in Los Angeles and remains in custody. It's unclear if he is represented by an attorney.
The USC graduates received encouragement and support from officials at the state-run Tianjin University, according to the indictment.
In 2006, Hao Zhang worked for Skyworks Solutions Inc. in Woburn, Massachusetts, and Wei Pang took a job in Fort Collins, Colorado, with Avago Technologies, which has headquarters in San Jose, California, and Singapore.
Wei Pang allegedly sent an email to two other defendants soon after, forwarding notes he took during a work meeting in 2006.
"My work is to make every possible effort to find out about the process's every possible detail and copy directly to China," Wei Pang is alleged to have written.
Hao Zhang and Wei Pang quit their U.S. jobs in spring of 2009 to become professors at Tianjin University, a prestigious Chinese college 130 miles southeast of Beijing. The men worked with administrators and a graduate student to establish a Chinese company to make the technology.
Avago executives became suspicious of the Tianjin team when they saw Hao Zhang's patent applications for technology created by the company, according to the indictment.
Richard Ruby, Wei Pang's former boss at Avago attended a conference in China in late 2011 and toured the new Tianjin lab created by the defendants, according to the indictment. During that tour, he recognized technology stolen from Avago and confronted Wei Pang and Jingpin Chen, a college dean, the indictment stated.
Wei Pang and Jingpin Chen denied stealing any technology, according to the indictment.
Jingpin Chen is also named in the indictment along with Zhao Gang and Chong Zhou. None of the defendants in China could be reached for comment.
AP writer Matthew Pennington contributed to this report from Washington, D.C.