You Trial Begins At Federal Courthouse in Greeneville

Jury selection in the trial of Xiaorong You, also known as Shannon You, began Tuesday at the U.S. District courthouse in Greeneville. You is charged by the government with conspiracy to commit economic espionage and economic espionage for allegedly stealing more than $119 million worth of trade secrets from companies that include Eastman Chemical Company in Kingsport.

There has been much talk in recent years about the Chinese government engineering efforts to appropriate American technologies and intellectual property. A jury trial that started Tuesday in U.S. District Court in Greeneville will explore the issues of economic espionage and allegedly stolen trade secrets.

Xiaorong You, also known as Shannon You, is charged by the federal government in an 11-count indictment with conspiracy to commit economic espionage for allegedly stealing more than $119 million in trade secrets from multiple companies, including Eastman Chemical Company in Kingsport.

You, 57, formally entered a not guilty plea Tuesday to the charges. Her defense team includes Greeneville lawyers Corey B. Shipley and Curt Collins, along with Johnson City lawyer Thomas C. Jessee. Shipley is a former federal prosecutor.

Senior U.S. Judge J. Ronnie Greer will preside at the trial, which may last up to three weeks.

Collins said the government could present more than 30 witnesses and 500 exhibits in support of its case. It is not immediately known if You will testify in her own defense.

You’s trial has been continued several times because of health concerns related to the COVID-19 pandemic. Jury trials have resumed in federal court, with social distancing, Plexiglas barriers and other COVID-19 safety protocols being observed.

The 12-person jury and four alternates were selected Tuesday. Opening statements by the government and defense are expected Wednesday morning.

A bespectacled You, wearing a black pants suit and pink shirt, sat with her defense team Tuesday afternoon as Greer explained the charges to the jury.

ESPIONAGE CHARGE

You was indicted in February 2019 by a federal grand jury sitting in Greeneville for conspiracy to steal trade secrets related to a flavor-preserving process that coats the inside of cans. She was also indicted on seven counts of theft of trade secrets and one count of wire fraud.

You worked for about five years as an engineer with Coca-Cola in Atlanta prior to her employment with Eastman Chemical Company.

A superseding indictment filed in August 2020 by federal prosecutors adding the espionage charges alleges You and two Chinese co-defendants conspired to “knowingly steal and without authorization” trade secrets belonging to companies that include Eastman Chemical, Akzo-Nobel, Dow Chemical, PPG Industries, Sherwin Williams and ToyoChem.

The trade secrets were allegedly stolen “to knowingly and intentionally benefit the Chinese Communist Party and governments of the People’s Republic of China” along with Shandong Province in China, the Chinese city of Weihai and what the government terms “China Company #1.”

You, who was born in China but was naturalized as a U.S. citizen in 1992, remains in the custody of the U.S. Marshals Service. You lists a home address in Lansing, Michigan. Defense motions to allow You to be released on bond have been denied by Greer, who agreed with the government’s contention that she is a potential flight risk.

GOVERNMENT ALLEGATIONS

Also named in the superseding indictment for conspiracy to commit economic espionage is 62-year-old Liu Xiangchen, 61, of Shandong Province, China; and Hongmei Fan.

The indictment alleges that You, Liu, and Fan, who is also believed to be in China, “formulated a plan in which You would exploit her employment with the two American employers to steal trade secrets and provide the information for the economic benefit of the Chinese company that Liu managed, which would manufacture and profit from products developed using the stolen trade secrets.”

The indictment alleges that in exchange, Liu “would cause the Chinese company to reward You for her theft, by helping her receive the Thousand Talent(s) Plan and another financial award, based on the trade secrets she stole, and by giving You an ownership share of a new company that would ‘own’ the stolen trade secrets in China.”

The Thousand Talents Plan is a Chinese government-backed technology awards program similar to a grant.

‘MULTIPLE COMPANIES’ ALLEGEDLY TARGETED

Conspirators also allegedly agreed “to compete with U.S. and foreign companies, including some of the owners of the stolen trade secrets, in China and elsewhere, by selling products designed, developed and manufactured using the stolen trade secrets,” the 2020 indictment states.

Jay Tabb, FBI executive assistant director for the National Security Branch, said in 2019 that You and her co-defendants “didn’t stop at going after technical secrets belonging to just one company. They allegedly targeted multiple companies and made off with trade secrets at an estimated value of almost $120 million.”

The government’s case is prosecuted by the U.S. Attorney’s Office Eastern District of Tennessee and the National Security Division’s Counterintelligence and Export Control Section.

“The conduct alleged in (the) indictment exemplifies the rob, replicate and replace approach to technological development,” John C. Demers, U.S. Assistant Attorney General-National Security, said after You’s initial indictment.

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