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Arlington Heights man charged with economic espionage
By Rob Olmstead | Daily Herald Staff
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Published: 3/27/2009 12:46 PM | Updated: 3/27/2009 4:21 PM

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At 11 a.m. Friday, David Yen Lee of Arlington Heights was supposed to be in the air on a plane to China, authorities said.

Instead, he was sitting in a courtroom awaiting a hearing, wearing the never-flattering orange jumpsuit that signals one is a resident of the Metropolitan Correctional Center, the federal detention center in downtown Chicago.

Prosecutors say Lee, 52, a native of Taiwan, stole paint formulas from his Wheeling employer, Valspar, and was planning to carry them to China, where he had taken a job with a Valspar competitor. Valspar manufactures paints and other types of coatings.

Lee was Valspar's technical director of new product development, and had been to China at least four times in 2008 to work on projects with a Valspar subsidiary in China, Huarun Limited, prosecutors said.

During one of those trips, a co-worker told authorities, Lee seemed particularly interested in the company's research on a Chinese competitor, Nippon Paint, according to a criminal complaint signed by FBI Agent Eric Shiffman.

On March 16, two weeks after returning from one of the last of those trips, Lee abruptly quit his job at Valspar, the complaint said.

The company found "irregularities involving his computer and his account" and notified the FBI, said Mike Dougherty, a spokesman for Valspar, which is headquartered in Minneapolis and has a facility at 1191 Wheeling Road in Wheeling.

One of the suspicious tipoffs was that Lee's laptop had been wiped clean, the FBI said.

Also discovered was prohibited copying software and evidence of recent downloads of information. A federal search warrant for Lee's apartment at 400 W. Rand Road was obtained. There, agents found a packed carry-on bag with a thumb drive that contained trade secrets for paint formulas, according to the complaint. The formulas were not ones that Lee had worked on, and so he would have no reason to have them at his home, the complaint added.

Additionally, Lee had purchased a one-way ticket to China, scheduled to depart Friday at 10 a.m.

Assistant U.S. Attorney Michelle Nasser asked U.S. Magistrate Judge Sidney I. Shenkier to hold Lee in jail until his detention hearing on Thursday, citing Lee's packed bag and travel plans as evidence of a risk of flight. Additionally, she said, Lee had told a co-worker that he planned to move to China and start a new life there. Schenkier granted the request.

Lee is seeking a private attorney who will represent him at the detention hearing, said his temporary attorney, Sergio Rodriguez of the federal defenders office.

In addition to the thumb drive found, authorities said, Lee's profile on LinkedIn, a professional networking site, proclaimed that he had quit Valspar and was now employed at "a major paint company in Asia."

According to the criminal complaint, the Valspar formulas taken were for a major domestic customer of Valspar's whose business brings Valspar $600 million a year. The customer was not identified.