A Chinese national has pleaded guilty to conspiring to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese drug company he helped start that’s backed by Chinese-regime funding.
Li Tao, 45, is the second person to plead guilty in a scheme that involves five co-defendants, including his friends Xue Yu and Mei Yan.
According to the Justice Department, Xue funneled key documents from GSK to Li and Mei that contained information about biopharmaceutical products that were under development, including research data and manufacturing processes related to those products. Xue usually used email or portable storage devices to transfer the documents.
Such products usually cost “in excess of $1 billion dollars” to research and develop, the Justice Department said.
On Jan. 5, 2016, the FBI (Federal Bureau of Investigation) arrested Li and seized his computer, where officials found GSK documents sent by Xue, who was employed at GSK to develop biopharmaceutical products, according to a press release by the U.S. Justice Department on Sept. 14. An Aug. 31 report by the Philadelphia Inquirer indicated that she was a protein biochemist working at a GSK research facility in Pennsylvania. Xue was soon fired by GSK and arrested. She faces up to 10 years imprisonment after pleading guilty to a conspiracy charge on Aug. 31.
“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 jobs here in America. Not only is this a serious crime, but it is literally a form of economic warfare against American interests,” U.S. Attorney William McSwain said in the statement.
Li will be sentenced on Jan. 4, 2019, at a federal court in Philadelphia. He also faces up to a decade in prison.
Li, also a scientist, along with Xue and Mei, established a Chinese pharmaceutical company, Renopharma, based in the city of Nanjing, Jiangsu Province, that was marketed as specializing in the development of anti-cancer drugs.
On Chinese job-recruitment websites, Renopharma was touted as a “high-tech biopharmaceutical company established by several PhD scientists who studied in the U.S. and has returned to China.”
“In reality, though, Renopharma was used as a repository of stolen information from GSK,” the Justice Department release stated. The UK-based GSK is one of the world’s largest drug companies.
Renopharma received financial support and subsidies from the Chinese government. In a 2015 interview conducted by the Chinese regime’s mouthpiece, the People’s Daily, Li Tao boasted that his company received close to 2 million yuan (about $291,000) in funding from the Nanjing municipal government, Jiangsu provincial government, and other authorities—in addition to free rent for the company’s office for two years, and favorable loan conditions from banks.
A Pattern of Chinese Espionage
This is the latest in a string of cases involving Chinese nationals conducting science and tech-related espionage beneficial to Beijing.
The Chinese regime has targeted high-tech sectors spanning from pharmaceuticals to new energy vehicles for aggressive development, part of its industrial plans to become a tech superpower.
The FBI, in particular, has focused on investigating foreign talent recruitment programs that target nationals working and studying abroad. China’s Thousand Talent program has been under scrutiny, as it targets science and tech professionals—many of them ethnic Chinese—with lucrative financial packages to work in China.
According to a 2016 BBC Chinese report on the GSK case, in 2013 and 2014, Li was selected for a number of “talent and entrepreneur reward” programs by Nanjing City and Jiangsu Province authorities, designed to encourage overseas Chinese to develop science and tech firms in China with government funding.