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South Korean firm accused of stealing secrets for Kevlar

By Terry Frieden, CNN Justice Producer
updated 4:43 PM EDT, Thu October 18, 2012
STORY HIGHLIGHTS
  • Indictment says Kolon Industries stole trade secrets from DuPont and a Japanese firm
  • A DuPont plant in Richmond, Virginia, makes Kevlar
  • The high-strength fiber is used in body armor, fiber-optic cables and industrial products

Washington (CNN) -- A South Korean competitor of DuPont Co. allegedly stole the U.S. chemical company's trade secrets for Kevlar, according to a federal indictment.

The six-count indictment unsealed on Thursday in Alexandria, Virginia, alleged that Kolon Industries engaged in a several year effort to steal trade secrets related to the high-strength product used in protective vests, body armor, fiber optic cables and other industrial products.

Kolon makes a product called Heracron that competes with Kevlar.

Five Kolon employees were charged in the indictment that was returned on August 21 by a grand jury in Richmond but kept sealed until U.S. and Korean authorities could decide how to handle the case.

Assistant Attorney General Lanny Breuer said at a news conference that the Korean government has been fully cooperative, and the process of extraditing the Kolon employees has begun. Officials would not speculate on when the defendants might be turned over for trial.

A DuPont plant in Richmond makes Kevlar.

Neil MacBride, the U.S. attorney for the Eastern District of Virginia, said the government will seek at least $225 million from Kolon. The amount approximates Kolon's profits from the sale of Heracron over six years.

DuPont's primary competitor in the industry, the Japanese firm Teijin, was also targeted by Kolon for intellectual property theft, the indictment said.

Officials say the theft of trade secrets and other intellectual property amounts to hundreds of billions of dollars a year, and negatively impacts the U.S. economy.

The charges of conspiracy and stealing trade secrets carry penalties of up to 10 years in prison and fines of $250,000.

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