Scientist Charged with Stealing Drug Recipes

Wed, 11/30/2011 - 5:22am
PAUL FOY, Associated Press


It's the first time authorities have filed industrial espionage charges in Utah, said Karl Schmae, a special agent with the FBI's Salt Lake City office.


"Our knowledge in making these chemicals is really our value," Miller said. "It's a compound mostly unique to us. We developed the recipe for large quantities" that can be worth millions of dollars per kilogram.

The federal complaint alleged that Prabhu Mohapatra emailed the secrets to his in-law, who was setting up a unregistered, competing company in India called Medchemblox. Authorities tracked Mohapatra's moves on a company computer.


"Please do not make any product currently present in Frontier Scientific's catalogue," Mohapatra wrote on Oct. 29 to his brother-in-law, according to the complaint. "I will lose my job and even could face jail time."




Schmae said industrial espionage is a crime that often goes unnoticed "until you see a competitor showing up with a similar product." Federal authorities are trying to encourage U.S. companies to report thefts of intellectual property, but many companies handle them internally, afraid the news will lower their company's stock value or send investors fleeing, he said.

"In some cases, there's just a lack of awareness that the threat is out there," Schmae said.

Until 1996, the theft of trade secrets wasn't a federal crime, and the FBI had spotty success trying to prosecute such cases using various other statutes, such as wire fraud. Congress then passed the Economic Espionage Act, giving the FBI full authority to pursue the cases.

Miller said he wasn't reluctant to report Mohapatra to authorities.

"We're a small company and we don't have the stick like the U.S. government," Miller said. "Quite often when these trade secrets are stolen, there isn't any recourse for a small company like ours. We didn't hesitate at all."



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