A former chemist for Valspar Corp. pleaded guilty this week to stealing trade secrets worth up to $20 million from the Minneapolis-based paint and coatings company as he prepared to go to work for an overseas competitor.
David Yen Lee, a technical director in Valspar's architectural coatings group in Wheeling, Ill., admitted in U.S. District Court in Chicago that he used his access to the company's secure internal computer network to steal paint and coating formulas and other proprietary information on product research, raw materials, sales and marketing. The thefts occurred between November 2008 and March 2009, according to a plea agreement.
"We take the protection of our intellectual property very seriously, and it is reassuring to know that the FBI is serious about working with the private sector in identifying and preventing economic espionage," said Valspar spokesman Michael Dougherty.
Lee, 54, had worked at the Valspar facility since 2006. His duties included scouting new paint technologies, coordinating with other paint laboratories, coordinating staffing and projects with Huarun Ltd., a Valspar subsidiary in China.
According to the plea agreement, Lee had started negotiating for a job with Nippon Paint in Shanghai in September 2008 and in February 2009 accepted a job offer as vice president of technology and administrator of research and development. He didn't tell Valspar about his new job at Nippon until he resigned in March 2009.
Court documents said Valspar discovered the theft two days after Lee turned in his company-issued computer and left the firm. An examination of the computer by Valspar found that Lee had deleted files, e-mails and the browser history in an attempt to remove the history of his computer use. Valspar also found a hidden file with unauthorized software programs, including one that had been used for copying trade secrets and other proprietary information.
Lee is scheduled to be sentenced in November. He faces a maximum 10 years in prison and a $250,000 fine. The plea agreement notes an advisory federal sentencing guideline range of 57 to 71 months in prison. The court also must order mandatory restitution.
Susan Feyder • 612-673-1723
