Chinese Company Sinovel Wind Group Convicted of Theft of Trade Secrets

https://www.justice.gov/usao-wdwi/pr/chinese-company-sinovel-wind-group-convicted-theft-trade-secrets

Department of Justice
U.S. Attorney’s Office
Western District of Wisconsin

FOR IMMEDIATE RELEASE
Wednesday, January 24, 2018

Chinese Company Sinovel Wind Group Convicted of Theft of Trade Secrets

MADISON, WIS. – A manufacturer and exporter of wind turbines based in the People’s Republic of China was convicted today of stealing trade secrets from AMSC, a U.S.-based company formerly known as American Superconductor Inc., announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Scott C. Blader for the Western District of Wisconsin.

Following an 11-day trial, a jury sitting in Madison, Wisconsin, convicted Sinovel Wind Group Co. Ltd., dba Sinovel Wind Group (USA) Co. Ltd. (Sinovel) of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud. Sentencing is set for June 4.
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As proven at trial, Sinovel stole proprietary wind turbine technology from AMSC in order to produce its own turbines powered by the stolen intellectual property. AMSC developed the technology – software that regulates the flow of electricity from wind turbines to electrical grids – in Wisconsin and elsewhere. At the time of the theft in March 2011, Sinovel had contracted with AMSC for more than $800 million in products and services to be used for the wind turbines that Sinovel manufactured, sold, and serviced.

Sinovel was charged on June 27, 2013, along with Su Liying, the deputy director of Sinovel’s Research and Development Department; Zhao Haichun, a technology manager for Sinovel; and Dejan Karabasevic, a former employee of AMSC Windtec Gmbh, a wholly-owned subsidiary of AMSC. The evidence presented at trial showed that Sinovel conspired with the other defendants to obtain AMSC’s copyrighted information and trade secrets in order to produce wind turbines and to retrofit existing wind turbines with AMSC technology without paying AMSC the more than $800 million it was owed and promised. Through Su and Zhao, Sinovel convinced Karabasevic, who was head of AMSC Windtec’s automation engineering department in Klagenfurt, Austria, to leave AMSC Windtec, to join Sinovel, and to steal intellectual property from the AMSC computer system by secretly downloading source code on March 7, 2011, from an AMSC computer in Wisconsin to a computer in Klagenfurt. Sinovel then commissioned several wind turbines in Massachusetts and copied into the turbines software compiled from the source code stolen from AMSC. The U.S.-based builders of these Massachusetts turbines helped bring Sinovel to justice. Su and Zhao are Chinese nationals living in China, and Karabasevic is a Serbian national who lived in Austria, but now lives in Serbia.

According to evidence presented at trial, following the theft, AMSC suffered severe financial hardship. It lost more than $1 billion in shareholder equity and almost 700 jobs, over half its global workforce.
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