Indictment: Ex-Lilly Workers Stole Trade Secrets

INDIANAPOLIS (AP) -- Three former employees of Eli Lilly and Co. sent trade secrets the company valued at more than $55 million to a competing Chinese drug company, according to a federal indictment unsealed in Indianapolis Tuesday.

The indictment charges Guoqing Cao and Shuyu Li, both of Carmel, with seven counts of theft and conspiracy to commit theft, the Indianapolis Business Journal reported. The indictment did not name the third man.

The indictment alleges Cao and Li emailed sensitive information about nine experimental drug research programs at Lilly to the third man when he was employed by Jiangsu Hengrui Medicine Co. Ltd. in China.

U.S. Attorney Joe Hogsett and his deputy, Cynthia Ridgeway, characterized the alleged theft as a crime against the nation.

"If the superseding indictment in this case could be wrapped up in one word, that word would be 'traitor,'" Ridgeway told Magistrate Judge Mark Dinsmore during a detention hearing for Cao and Li. Dinsmore did not immediately rule on the detention of the men.

"Stolen trade secrets account for billions of losses for American companies throughout our nation," Hogsett told reporters after the hearing.

Cao and Li were arrested Oct. 1. They appeared in court handcuffed and dressed in striped jail uniforms, according to the Business Journal.

Attorneys for each man argued their clients should be released from custody and would surrender their passports.

Scott Newman, who represents Li, said the U.S. Attorney's office failed to prove the two men needed to be detained further.

"No, the word is not treason. The word is overreach," Newman said.

Prosecutors sought to continue detaining Cao and Li, contending the two scientists were flight risks and a "financial danger" to Lilly.

Bill Heath, the head of global product development for Indianapolis-based Lilly, testified their knowledge could help Hengrui duplicate Lilly's research. Those trade secrets involve drugs being developed to treat cardiovascular disease, diabetes and cancer.

"Because of their know-how and their continued access to the information, they would be in a position to direct others how to use the information," Heath said.

Lilly General Counsel Michael Harrington said the trade secrets in question involve early-stage research.

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