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9 indicted in HTC industrial espionage case
Taiwan News, Staff Writer
2013-12-27 02:50 PM
TAIPEI (Taiwan News) – Nine people including top designers at HTC Corporation were indicted Friday for trying to sell confidential information about a new cell phone to China.

The company’s former top designer, Thomas Chien, and its industrial design chief, Wu Chien-hung, played a key role in a scheme to hand over key data about interface technology on the new smartphone to Chinese competitors while also demanding more than NT$33.5 million (US$1.1 million) in kickbacks from domestic businesses, prosecutors said. In addition to the two men, another four HTC employees and three suppliers were also charged Friday for violating business confidentiality and breach of trust laws.

The Taipei District Prosecutors Office said that Chien reproduced key elements of the new phone model and took them to Beijing where he leaked the data to other business people last June 23. Chien had the intention of using the information for a new company he was planning to set up in China, prosecutors said.

In a separate scam, they misreported costs and expenses using fake invoices while also asking for more than NT$33.5 million in kickbacks, causing HTC to lose money, according to prosecutors.

Chien and Wu had no regard for the fact that they were high-level managers at HTC and should be examples to its staff, but instead they persuaded several of their departments’ employees to prepare to join them at their new company, investigators said.

The prosecutors recommended the court give Chien a severe sentence because the former HTC designer still refused to acknowledge that some of his actions violated the law. For similar reasons, they also wanted a tough sentence for Hung Tsung-yi, a former manufacturing design manager at the phone maker.

The prosecutors recommended suspended sentences for two men who had fully cooperated with the investigation and reached separate agreements with HTC, and light sentences for four others.

It was HTC itself which brought the case to light in late August when it sued Chien, Wu and engineer Huang Hung-yi, accusing them of setting up fake deals and of passing on business secrets to China.

Chien and Wu have been detained since August 31, the day after prosecutors raided offices and homes during which they also impounded NT$8 million (US$267,000) in cash. Just days later, they found NT$7.8 million (US$260,000) in the trunk of a car belonging to Chien.

The designer joined HTC in 2001 and recruited top design talent for the company, whose cell phones are known across the world. Earlier this year, the group employed Iron Man and Sherlock Holmes star Robert Downey Jr. for a worldwide advertising campaign.

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