Trial Looms for Chinese Professor Accused of Trade Theft, Espionage

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Chinese scientist Hao Zhang is set to stand trial for stealing trade secrets and economic espionage beginning in February at the U.S. District Court in downtown San Jose.

Jury selection is set for Feb. 13.
Attorneys for Hao Zhang seek to exclude his statements to the FBI and to dismiss all criminal charges related to Avago Technologies, which first sought the prosecution in 2012.

By Sharon Simonson

A Chinese scientist accused of stealing trade secrets from two Silicon Valley semiconductor companies says FBI agents failed to explain that he had been arrested and had the right to an attorney before they questioned him for three hours at the Los Angeles International Airport.

Now lawyers for 39-year-old Hao Zhang want U.S. District Court Judge Edward J. Davila to prohibit the government from using his statements at trial.

Attorney Yitai Hu of Alston & Bird LLP in Menlo Park is one of Hao Zhang’s defense attorneys.

Zhang’s attorneys also are seeking to dismiss all charges related to any purported trade secrets owned by Avago Technologies Ltd., the San Jose and Singapore-based company that initiated the federal government’s criminal prosecution in 2012. The other company is Massachusetts-based Skyworks Solutions Inc.

Despite an April 2016 court-approved subpoena, Avago has not disclosed information the defense deems critical to its case. Zhang is being denied his rights to due process and a fair trial, they argue. As a consequence, the Avago-related charges should be dismissed.

The defense motions precede an anticipated fourteen-day jury trial for the professor before Judge Davila in federal court in downtown San Jose. The trial dates have been set over several weeks beginning Feb. 13 with jury selection. Davila and Magistrate Judge Nathanael Cousins, who is presiding over portions of the case as well, have set December and January hearings for the two pending motions.

Attorney Thomas Nolan of Nolan Barton Bradford & Olmos LLP in Palo Alto is helping to defend Hao Zhang.

Avago has estimated that it and its predecesor companies invested $50 million over two decades to perfect its proprietary filtering technology. Zhang never worked for Avago, but one of his five alleged co-conspirators did. (Avago is now known as Broadcom.) Zhang worked for Skyworks for three years from 2006 to 2009.

The federal government accuses Zhang and the five men, all of whom are Chinese citizens, of stealing  nanotechnology used in wireless electronic devices like cell phones to minimize signal interference. The technology also has military applications. The men allegedly acted on behalf of themselves, China’s Tianjin University, and the People’s Republic of China.

Zhang has been under U.S. federal court authority and police control since May 16, 2015, the day he was arrested while still onboard his airplane as it sat on the LAX tarmac after its flight from China.

Attorney Daniel Olmos of Nolan Barton Bradford & Olmos LLP in Palo Alto is helping to defend Hao Zhang.

At the airport, Zhang was separated from his wife, who was traveling with him to the International Microwave Symposium conference in Phoenix. He was then taken to a room that even one of the FBI agents described as “stark,” and questioned. Both Zhang and his wife had flown to the United States with the expectations of being admitted on previously issued State Department visitor visas. The flight time from Beijing to LAX is a little more than thirteen hours, according to TravelMath.com.

Zhang was detained based on a sealed grand jury indictment handed up in San Jose on April 1, 2015.

According to a partial transcript filed in federal court of the airport interview, neither FBI Special Agent Richard Smith nor FBI Supervisory Special Agent Heather Young told Zhang that he had been arrested and that he had been indicted forty-five days earlier by a federal grand jury on thirty-two criminal counts alleging conspiracy, economic espionage and theft of trade secrets. Nor did they tell Zhang that he faced the threat of years of imprisonment and hundreds of thousands of dollars in fines. Instead, Smith informed Zhang that Zhang could use a nearby restroom if needed: “We can walk over there and get that done;” and that there were snacks and drinks if he were hungry.

Smith then told Zhang that he wanted to be “upfront” with him and that he wanted to offer him a chance “to work together as a team and move forward,” or that Zhang could “take a different path.”

“Yeah. Yeah. I just want to know what is happening,” Zhang said.

Agent Young responded that they needed to ask first about any medical conditions. Then she and Agent Smith asked an additional dozen or so questions about Zhang’s current home address and any U.S. assets.

Zhang answered them all, then asked again, “I just want to know—what’s going on here?”

“We’re moving there and I want to give you all that clarity, so I want to describe the whole case to you,” Smith replied.

Shortly thereafter, Agent Young sought Zhang’s signature on a document attesting that he had been told of his rights not to speak to the agents and to have an attorney present during any questioning. “So as you’ve probably seen or heard this before, this is what we call Advice of Rights Form,” Agent Young said as she handed him the paper for him to sign to waive those rights.

Detail from the memorial by artist Ruth Asawa to Japanese-Americans interned during World War II. Asawa, the daughter of Japanese immigrants, was imprisoned along with her family. The memorial is outside the federal courthouse in downtown San Jose. (Photo by Sharon Simonson)

Zhang had not lived in the United States since 2009 and did not speak English regularly. He had never been arrested in the United States or China. A Mandarin interpreter translates all trial proceedings for him. There was no interpreter present at the FBI interview.

Zhang signed the form offered by Agent Young. It was only at the end of the interview, hours later, that he realized he had been arrested.

For nearly all of the last two and a half years since, Zhang has lived under house arrest in an undisclosed location in Mountain View. Before that he was an inmate at the Santa Clara County jail.

Zhang holds a doctoral degree in electrical engineering from the University of Southern California, where he met one of his purported co-conspirators. His attorney Thomas Nolan (one of about a dozen Zhang has) described him as an expert in the filtering technology at issue in the case.

After his arrest, Tianjin University issued a statement defending Zhang and its other two professors also named in the indictment. It also pledged to provide “necessary humanitarian and legal assistance” to Zhang.

Zhang’s wife remained with him in Mountain View for a number of months after his arrest but then was forced to leave the country when her visa expired.

In the minutes prior to a short, administrative hearing Nov. 13 before Judge Davila, Zhang sat alone outside the courtroom on one of several long wooden benches. He wore faded black pants, black running shoes, and a black-and-white striped, collared long-sleeved shirt, tucked in.

He has a large round face; his black hair was jaggedly and un-stylishly cut, almost as though he might scissor it himself. He had a small round reddish blemish on his left forehead; his skin was pasty.

When presented with a reporter’s business card, he at first smiled broadly, revealing a wide set of teeth each separated by a tiny space. The smile faded quickly to a hard thin line as he realized the nature of the exchange upon a request for an interview. He looked forward and held the card awkwardly in both hands, referring queries to his attorneys.

A few minutes later in court, two men sitting in the gallery exchanged pleasantries.

“It’s funny, we say the national anthem at baseball games—,” one fellow said to the other.

“But not in court,” the other guy filled in.

“All rise,” the bailiff sing-songed as Judge Davila entered the room.

Zhang sat behind them, toward the back of the gallery, which was full of attorneys and clients and their families whose cases were set for hearing that afternoon. Zhang’s was the first case that Davila called.

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