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US charges Sinovel over theft of trade secrets

Loss of more than $800m for AMSC.

The US Department of Justice (DoJ) has charged the Chinese wind turbines manufacturer Sinovel Corporation and its two employees, and a former employee of US-based AMSC Windtec for theft of trade secrets that caused a loss of more than $800m.

A federal grand jury in the Western District of Wisconsin charged Sinovel Wind Group, Su Liying, the deputy director of Sinovel’s R&D department, Zhao Haichun, a technology manager for Sinovel; and Dejan Karabasevic, a former employee of AMSC Windtec, a subsidiary of AMSC.

“The allegations in this indictment describe a well-planned attack on an American business by international defendants--nothing short of attempted corporate homicide,” said US Attorney John Vaudreuil.

“These criminal acts have led to significant financial harm to AMSC, its employees and their families as well as its shareholders. Over the past two years, more than 500 staff members worldwide have lost their jobs following Sinovel's egregious and unlawful behavior,” said Daniel McGahn, CEO of AMSC.

The alleged individuals are charged with stealing the PM3000 source code from AMSC on 7 March 2011, and transmitting it by downloading it  from an AMSC computer in Wisconsin to a computer in Klagenfurt.

In March 2011, Sinovel owed AMSC more than $100m for products and services previously delivered and had signed contracts to buy more than $700m in products and services from AMSC in the future, according to the indictment.

The indictment alleges that Sinovel, through Liying and Haichun, hired Karabasevic to leave AMSC Windtec and join Sinovel, and to secretly copy intellectual property (IP) from the AMSC computer system.

DoJ said that following the theft of AMSC’s IP, Sinovel installed several wind turbines in Massachusetts and copied into the turbines software compiled from the software stolen from AMSC. 

If convicted, Sinovel would face a fine of up to twice the alleged loss of more than $800m.