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Exclusive: U.S. accuses China of instigating plot against DuPont

DuPont logo is pictured on research center in Meyrin near Geneva
DuPont logo is pictured on research center in Meyrin near Geneva

By Dan Levine

SAN FRANCISCO (Reuters) - Chinese government representatives directed a U.S. businessman to obtain valuable technology manufactured by chemical giant DuPont and U.S. authorities were seeking on Wednesday to keep him in jail ahead of his trial on charges relating to trade secret theft, prosecutors said in newly released court documents.

Walter Liew, a U.S. citizen, and his wife, Christina Liew, each were indicted last year by a Northern California grand jury on three counts, including witness tampering, making a false statement and conspiracy to tamper with witnesses and evidence, according to court documents.

A hearing on bail is scheduled for Walter Liew on Wednesday in U.S. federal court in San Francisco as prosecutors try to keep him behind bars.

According to court documents, Walter Liew paid at least two former DuPont engineers for assistance in designing chloride-route titanium dioxide, also known as TiO2. DuPont is the world's largest producer of the white pigment used to make a range of white-tinted products, including paper, paint and plastics.

Both Liew, 54, and his wife have pleaded not guilty. Liew was held without bail, while his wife was released, court documents show.

DuPont also filed a civil lawsuit against Liew for misappropriating trade secrets.

Liew denies obtaining or possessing "any confidential, proprietary trade secret materials" from DuPont regarding TiO2, according to court documents.

Last month, Liew's attorneys requested that a U.S. magistrate judge reconsider the decision to deny Liew bail. In the court filing on Tuesday, prosecutors argued for Liew's continued incarceration by listing his connections with Chinese officials.

Liew was hosted at a banquet in 1991 by Luo Gan, who at the time was a high-ranking official of the Communist Party of China Central Committee, according to correspondence from Liew that U.S. federal officials say they seized from his safety deposit box. Luo Gan went on to become a member of the nine-member Standing Committee of the Politburo, prosecutors wrote in the filing.

Several other Chinese officials also attended, according to the documents.

"The purpose of the banquet is to thank me for being a patriotic overseas Chinese who has made contributions to China," Liew wrote in a memo to a Chinese company, according to U.S. prosecutors, "and who has provided key technologies with national defense applications, in paint/coating and microwave communications."

Luo Gan gave Liew directives at the meeting, and two days later Liew received a list of "key task projects," including TiO2, prosecutors stated.

"DuPont's state-of-the-art technology is not available publicly and PRC (People's Republic of China) companies have not been able to master it on their own," prosecutors wrote. "Liew, however, obtained that technology from former DuPont employees and sold it to companies controlled by the PRC government."

In his court filing seeking bail, Liew denies he was invited to a banquet with some Chinese officials, but Luo Gan is not discussed. In seeking bail, Liew's attorneys note that was born in Malaysia and has lived in the United States for 32 years.

The Chinese embassy in Washington did not immediately respond to an e-mail seeking comment early on Wednesday.

The case in U.S. District Court, Northern District of California is United States of America vs. Walter Liew and Christina Liew, 11-cr-573.

(Editing by Will Dunham)

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