United States Attorney Kevin V. Ryan
Northern District of California

FOR IMMEDIATE RELEASE
June 16, 2006
WWW.USDOJ.GOV/USAO/CAN

TWO BAY AREA MEN ARRESTED ON CHARGES OF STEALING TWO TECHNOLOGY COMPANIES’ TRADE SECRETS

SAN JOSE – Two Bay Area men were arrested this morning on charges of conspiracy to steal trade secrets and five counts of theft of trade secrets, U.S. Attorney Kevin V. Ryan announced. A federal grand jury in San Jose yesterday indicted Lan Lee, a.k.a Lan Li, of Palo Alto, and Yuefei Ge, of San Jose. The indictment was unsealed at their initial appearance this morning.

According to the indictment, Mr. Lee, 42, and Mr. Ge, 34, are alleged to have conspired to steal trade secrets from their employer at the time, NetLogics Microsystems, and Taiwan Semiconductor Manufacturing Corporation. The defendants created a company, SICO Microsystems, Inc., for the purpose of developing and marketing products derived from and using the stolen trade secrets. The trade secrets involved related to computer chip design and development.

"The protection of proprietary information is essential to this region’s economy," said U.S. Attorney Kevin V. Ryan. "A tremendous amount of resources go into producing the chips and software that are designated as trade secrets, and we are committed to the criminal prosecution of individuals who steal those trade secrets in an attempt to get an unfair advantage in the technology industry."

"Development of proprietary business information, commonly called trade secrets, is an integral part of virtually every aspect of U.S. trade," said Acting Special Agent in Charge Arthur Balizan. "Protecting trade secrets is essential to maintain the health and competitiveness of critical segments of the U.S. economy".

Lee, an American Citizen, and Ge, a Chinese national, appeared before Magistrate Judge Howard R. Lloyd this morning, and were released on $300,000 bond. Their next scheduled appearance is on June 21, 2006, at 1:30 p.m.

The maximum statutory penalty for each count of conspiracy to commit theft of trade secrets in violation of 18 U.S.C. 1832(a)(5), as well as the substantive counts of theft of trade secrets, in violation of 18 U.S.C. 1832(a)(1), (a)(2), & (a)(3) is 10 years and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

NetLogic Microsystems (NLM), is a computer chip design and development company located in Mountain View, California. Taiwan Semi-Conductor Manufacturing Company (TSMC) is a computer chip manufacturing company with facilities in Taiwan; San Jose, Calif.; Singapore; and Washington State.

An indictment contains only allegations against an individual and, as with all defendants, Mr. Lee and Mr. Ge must be presumed innocent unless and until proven guilty.

Matt Parrella is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Brenda Hodgen. The prosecution is the result of an investigation by Special Agents of the Federal Bureau of Investigation. NetLogics Microsystems and Taiwan Semiconductor Manufacturing Corporation co-operated with the FBI in the investigation.