The Company Man: Interview with Lead Investigator
FBI Special Agent Jeremiah Crabtree discusses his experience as the lead investigator on the case that inspired "The Company Man."
Jeremiah Crabtree, FBI Special Agent, Lead Investigator:
Economic espionage is a significant threat to the national security of the United States.
The economic impact to the United States companies from the theft of their trade secrets often results in the loss of profit, loss of jobs, and a significant impact to the industry.
The FBI estimates that the impact of economic espionage on United States companies is valued anywhere between $200 and 400 billion, and, on some accounts, up to $1 trillion.
We started our investigation on a complaint call from the United States company that complained that they had two Asian trespassers that came into their factory. They had toured the factory and filmed the location for an undetermined amount of time.
They called the FBI because they thought that it could have been an Asian competitor for that U.S. company.
From the initial complaint call, they were concerned that this would just be seen as a regular trespassing case to the FBI and the FBI would not be responsive.
We saw it as a little bit different, as a first avenue into a possible economic espionage or a theft of trade secret case.
We went to their location, investigated, found out the identities of the two trespassers, and then found out that it looked like they could be involved in the industry that this U.S. company is in.
A couple of weeks later, there was a newspaper ad that was published in their local paper where they were looking for a U.S. company engineer with specific formulary knowledge to go to China and start up a new business.
From that ad, we decided to conduct an undercover operation.
The company originally had concerns about going the, pursuing the criminal venue, and they were thinking about going a civil route.
In the past with economic espionage cases, we’ve had a difficult time interacting with a company.
Their concerns are legitimate. They’re a public or sometimes traded U.S. company. They have concerns that their financial information is going to be included in public documents with the court.
We heard those concerns, and in this particular case, we worked with the company to mitigate those concerns.
There were many phone calls that we had. In each point in the investigation, we gave them updates so they could decide on their end, because they had their own business interests, on how to follow through.
At some point we had a meeting between their legal representative and the United States Attorney’s Office where it was worked out and agreed upon what kind of information would be provided for the court and what kind of information would be withheld.
From there, we decided the best course of action would be to have a potentially undercover employee respond to the newspaper ad.
Once we got into the details about the extent of the engineering knowledge that our undercover employee would need to have, it just made more sense for us to borrow a U.S. company employee that already had that knowledge. And we could instruct them and assist them with the undercover operation.
From that point, they were a little apprehensive. They were concerned about their employee’s safety. They were concerned about how involved he would be. They were also concerned about the criminal proceedings, if his identity would be discovered and if he would have to testify.
From that, we negotiated and they agreed, with certain restrictions, that they would give us an employee.
I went and met with the employee. We started an e-mail exchange in response to that newspaper classified ad.
Right off the bat, once we submitted the resume of the employee, they were very interested.
As a matter of fact, they were not questioning any of his credentials.
They immediately wanted to hire him and have him come back to China to tour their potential plant within a matter of weeks.
We needed to slow them down to sort of discuss how this would play out and also meet with the company to explain exactly what the potential operation could be.
The idea was that we would lure them over here to exchange money for this company’s proprietary and trade secret information. So, we arranged for the following week that Ji Li Huang was going to have other business here in the United States, and he agreed to come and meet this employee of this U.S. company.
So, we set it up to where they met at a restaurant. We mic’d the employee up. We instructed him and gave him certain clues, we had certain words.
Right off the bat at that restaurant, they were very interested in the information he had to provide.
They were very happy to pay $100,000 and wanted the exchange to happen right away.
This U.S. company is considered an industry leader in the material that they make. It took them 20-plus years to develop that specific trade secret information.
If they were able to reproduce that product in China and reship to the United States, the company estimates within three to five years that they could potentially lose jobs and be out of business.
In the beginning, they were surprised that an Asian competitor would go to this degree to obtain their trade secret information. By the end, after the prosecution, I think they had a better understanding of the extent of how they had become a target.
Ji Li Huang was sentenced to 18 months in federal prison in California and agreed to pay a $250,000 fine.
Xiao Guang Qi, the translator for Ji Li Huang, was released, never to return back to the United States, and fined $20,000.
There are several things we call indicators that U.S. companies can watch for to protect their proprietary information.
Foreigners that target specific information from the United States companies use a broad range of methods to determine who they should target within the company—usually an engineer—somebody that has access to the specific knowledge they're looking for.
We've seen cyber attacks used a lot and continue to be in the future.
Conferences and industry events where competing customers are looking to obtain their proprietary information.
Joint ventures with foreign companies that may be looking to obtain their trade secret information.
Delegation visits. And social media, where their engineers post specific project information that foreign companies are looking to obtain. They target social media, LinkedIn, websites, anything that generally has a resume that shows that they have specific formulary knowledge.
The FBI currently has an initiative where their strategic partnership coordinators are tasked with educating United States companies on how they could become less of a target for theft of their trade secret or corporate espionage.
Through developing this relationship, we hope to garner their support in realizing that this economic espionage and theft of their trade secret is a very real problem.
This particular case is a great example of how the FBI and the United States Attorney’s Office has partnered with a United States company to protect their trade secret information.
Over this trusting relationship we’ve built, we’ve been able to assist them in covering up some of their vulnerabilities so they’re less of a target.
They’ve installed security cameras, they’ve tightened up their nondisclosure agreements, and really just a total mind shift change into protecting the information that they value so much.
At the end, the U.S. company was very appreciative that the FBI was able to intervene and protect their trade secret information.
The relationship continues because this company is not a target, just a one-time target. This company continually is being sought for their trade secret information.
If you believe your company is a target or a victim of theft of trade secret, the FBI would like to explore the criminal proceedings that we can add to the investigation.
Using the investigative authorities under Economic Espionage Act of 1996, the FBI is able to go overseas and potentially lure that foreign company benefactor into prosecution.
U.S. companies are being targeted on an ongoing basis by many countries all across the world. It’s vital that companies understand that the national security of the United States depends on their protecting their intellectual property.
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