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In DuPont Case, Accused Spy Hopes for Pretrial Present

The Recorder

He won't be home for the holidays. But after 17 months in jail, the man accused of selling U.S. trade secrets to Chinese companies could soon be released on bond, thanks to a push from his lawyers at Keker & Van Nest.

In a departure from two prior orders, U.S. Magistrate Judge Nathanael Cousins in San Francisco tentatively agreed Friday to place Walter Liew on home detention with electronic monitoring and possibly a 24-hour security guard.

"The fair thing to do at this point in the case is to release Mr. Liew with greater security than was proffered before," said Cousins, who told lawyers he would set an appropriate financial bond after reviewing Liew's finances.

Prosecutors allege Liew and his wife handed China the keys to a secret method developed by E.I. du Pont de Nemours & Co. for manufacturing titanium oxide, an industrial pigment used to give paper, paint and plastic coatings a bright white color.

Assistant U.S. Attorneys Peter Axelrod and John Hemann, who are handling the economic espionage case, vigorously opposed Liew's release, which must still be approved by the district judge overseeing the case.

Axelrod said an electronic ankle bracelet wouldn't prevent Liew from finding a way to flee the country to China, where prosecutors insist Liew controls bank accounts in the names of family members.

"If this guy wants to go, he's gone," Axelrod told Cousins. "What you have in this case is a dishonest person with tens of millions of dollars that are unaccounted for."

In reaching his decision to grant bond, Cousins said he considered that the case remains far from trial and Liew's detention would likely stretch into a third year.

Cousins said safeguards could be found to reasonably, if not "perfectly," assure Liew's appearance in court, particularly given the nonviolent nature of the allegations.

"We're not talking about a uranium case here or some kind of nuclear secrets," Cousins said. "We're talking about titanium oxide."

Securing Liew's release has been a top priority for lawyers Stuart Gasner and Simona Agnolucci since Keker entered the case in April, replacing two previous sets of defense lawyers.

They proposed a financial bond of $2 million as sufficient to secure Liew's appearance and told Cousins preparing for trial would be impossible with their client in detention, unable to access a computer or review confidential information at the crux of the trade secrets case.

The 55-year-old Liew — an American citizen with no passport, no criminal record and a 12-year-old son attending school in the East Bay — does not pose a flight risk, argued Gasner, a former federal prosecutor.

"The idea that he would stow away on a Chinese tanker is somewhat ridiculous," he said.

Liew was born in Malaysia and immigrated to the United States in 1980, receiving a degree in electrical engineering from the University of Oklahoma. He moved to the Bay Area in 1982 and worked for technology companies, including Advanced Micro Devices and Hewlett-Packard Co., before starting a series of small consulting businesses.

It was through his company USA Performance Technology Inc., headquartered in Oakland, that prosecutors allege Liew entered deals with Chinese companies to provide them with DuPont's proprietary method for producing titanium oxide, or TiO2. DuPont is the largest supplier of TiO2 worldwide and China was willing to pay Liew nearly $30 million for a piece of the action, prosecutors contend.

Gasner accused prosecutors in court filings of moving at a "glacial pace" and drowning the defense in a "Mount Everest of electronic materials."

To date, defense lawyers have received five terabytes of electronic discovery, which if printed would yield more than 250 million pages — some of it in Chinese — Gasner stated in a brief.

As for the trade secrets his client allegedly stole, Gasner argues much of the information is outdated, common knowledge in the industry, and in some cases, available from public sources like patents.

The case, Gasner wrote in Liew's motion for release, "is less the stuff of a spy novel and much more the grist of an ordinary civil trade secret case."

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Stuart Gasner centers his practice in the areas of white collar criminal and securities defense, intellectual property litigation and complex corporate disputes. A federal prosecutor before joining Keker & Van Nest, Mr. Gasner has tried more than 20 cases to verdict before juries across the United States.

Simona Agnolucci specializes in complex litigation, including intellectual property matters, securities cases, and commercial disputes. She has represented major brokerage companies and investment advisors, as well as cutting-edge Internet and smartphone companies.