10/29/2018 Ars Technica Mail - FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS Cyrus Farivar  FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS  Simmons, Abraham (USACAN)  To: "Simmons, Abraham (USACAN)"  Mon, Oct 29, 2018 at 5:08 PM       Department of Justice   United States Attorney Alex G. Tse Northern District of California _______________________________________________________________________________   FOR IMMEDIATE RELEASE WWW.USDOJ.GOV/USAO/CAN October 29, 2018   FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS   Indictment Filed in the Northern District of California; Defendants Alleged to Have Stolen Biotech Trade Secrets and Provided Them to Genentech Competitor in Taiwan   https://mail.google.com/mail/u/0?ui=2&ik=745e446567&view=lg&permmsgid=msg-f:1615706851639583699 1/4 10/29/2018 Ars Technica Mail - FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS             SAN FRANCISCO – A federal grand jury indicted Xanthe Lam, Allen Lam, John Chan, and James Quach for stealing trade secrets from Genentech and related charges, announced United States Attorney Alex G. Tse and FBI Special Agent in Charge John F. Bennett. The indictment, handed down on October 25, 2018, and unsealed today, alleges that the defendants stole confidential Genentech information to help a company in Taiwan create and sell drugs similar to those that were created by Genentech.               According to the indictment, Xanthe Lam worked for Genentech as a Principal Scientist from 1986 until 2017.  Her husband, Allen Lam, as well as John Chan and James Quach, all were former Genentech employees who became consultants for JHL Biotech, Inc., a company based in Zhubei, Taiwan, that develops “biosimilars.” Biosimilars are roughly the equivalent of a “generic” chemical drug, i.e., designed to have properties similar to a biopharmaceutical that previously was approved by a regulatory agency, such as the Food and Drug Administration.  The indictment alleges Xanthe Lam conspired with Allen Lam and John Chan to steal the company’s trade secrets related to biopharmaceuticals Pulmozyme, Rituxan, Herceptin, and Avastin.  Xanthe Lam allegedly downloaded, collected, and transferred to Allen Lam and others at JHL certain confidential Genentech documents relating to the processes by which the company formulated drugs and managed raw materials.  Xanthe Lam also allegedly secretly consulted for JHL while still employed at Genentech.   The indictment also alleges that Xanthe Lam conspired with former Genentech employee James Quach to illegally use her computer credentials.  Specifically, she allowed Quach to gain access to Genentech’s secure document repository and, once he had access to the repository, Quach stole the company’s proprietary manufacturing protocols.     In sum, the Indictment charges the defendants with the following crimes and, if found guilty, they are subject to the following maximum statutory penalties:   Defendant Age/Residence Charges Maximum Penalties Xanthe Lam 66/ South San Francisco, Calif. 18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture     18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet       18 U.S.C. § 1030(b) – Conspiracy to Commit Computer Fraud and Abuse       18 U.S.C. § 1030(a)(2) (C) and 2 – Computer https://mail.google.com/mail/u/0?ui=2&ik=745e446567&view=lg&permmsgid=msg-f:1615706851639583699   Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture   Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture   Five years of imprisonment; $250,000 fine, three 2/4 10/29/2018 Ars Technica Mail - FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS Allen Lam 68/ South San Francisco, Calif. Fraud and Abuse, Aid & Abet years of supervised release, $100 special assessment, forfeiture 18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture     18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet   John Chan 29/ San Francisco, Calif. 18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets     18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet   James Quach 58/ Daly City, Calif. 18 U.S.C. § 1030(b) – Conspiracy to Commit Computer Fraud and Abuse   Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture   Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture   Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture       Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture 18 U.S.C. § 1030(a)(2) (C) and 2 – Computer Fraud and Abuse, Aid & Abet   An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  In addition, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.   https://mail.google.com/mail/u/0?ui=2&ik=745e446567&view=lg&permmsgid=msg-f:1615706851639583699 3/4 10/29/2018 Ars Technica Mail - FORMER GENENTECH EMPLOYEES CHARGED WITH THEFT OF TRADE SECRETS The defendants were all arraigned this morning before U.S. Magistrate Judge Joseph C. Spero.  All defendants pleaded not guilty and were released on bond.  Magistrate Judge Spero scheduled the defendants’ next district court appearance for November 13, 2018, before U.S. District Judge William Alsup.  Quach also will appear on November 2, 2018, before Magistrate Judge Spero for identification of counsel.                Assistant U.S. Attorneys Matthew A. Parrella and Michelle J. Kane are prosecuting the case with the assistance of Elise Etter and Rebecca Shelton.  The prosecution is the result of an investigation by the FBI.   Further Information:               Case #: 18­527 WHA               A copy of this press release will be placed on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.                Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/ cgi­bin/login.pl.               Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.                All press inquiries to the U.S. Attorney's Office should be directed to Abraham Simmons at (415) 436­7264 or by e­ mail at Abraham.Simmons@usdoj.gov.       https://mail.google.com/mail/u/0?ui=2&ik=745e446567&view=lg&permmsgid=msg-f:1615706851639583699 4/4