Chinese scientists take on federal government, win David vs. Goliath battle

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By Russ McQuaid

INDIANAPOLIS, In (December 7, 2014) -- Guoquing Cao and Shuyu Li so believed in the ideals that are the United States of America that they became naturalized citizens.

That government and its pursuit of justice first indicted and then dropped the stolen trade secrets and wire fraud charges it lodged against the former Eli Lilly and Company employees.

"They used the word 'treason' to describe the conduct of my client and you know when you say the word 'treason,' in the law you're talking about something that can bring about the death penalty," said Scott Newman, the former Marion County Prosecutor who defended Li.

The two federal grand jury indictments against the former Lilly scientists included three sets of charges that were gradually amended and watered down to the point where a federal judge noted that the "teeth" of the counts had been removed.

Friday the U.S. Attorney announced the government was dropping its case against the men "in the interests of justice."

The motion asserted that "the defendants have no objections."

"They alleged that nine trade secrets had been transferred to a Chinese company by my client and another former Lilly employee," said Newman. "None of the material that was discussed among these scientists was secret. It was all public domain information."

Lilly and the government claimed that the pharmaceutical giant faced a predicted $55 million loss due to the alleged surrender of research into drugs to treat diabetes, cancer and cardiovascular disease.

The "crown jewels" is how Lilly described the intellectual property of the potential and unmanufactured drugs.

"We are appalled and very disappointed by the crimes allegedly committed by these former Lilly employees," read a company statement at the time of the October 2013 indictment.

"I think people got a little overenthusiastic, overzealous," said Newman. "And saw things that weren't there and rushed to judgment and it took us 15 months to turn that ship around. To change the mind of the U.S. government and Eli Lilly Company, for that matter, is like turning an aircraft carrier. It doesn't happen in a week's time. It took us 15 months of hammering away at the evidence to show that these men were innocent and were innocent all along.

"Fortunately I had my slingshot in good working order."

The case was brought by then-U.S. Attorney Joe Hogsett, who resigned last summer to announce recently that he was running for mayor in Indianapolis.

"I'm no longer in politics," said Newman who previously served in the office of the U.S. Attorney. "I'm just a defense lawyer, but I would say that if I were a prosecutor, it’s not a case I would put on my resume."

The day after he announced his candidacy, Hogsett told FOX59 News that as a former prosecutor it’s hard to lose any case.

"You're never going to be perfect," he said. "You're going to do the best you can. In most instances I think our efforts were successful. Some cases were personally disappointing but those are the kinds of decisions that you have to make when you decide as the U.S. Attorney that there is insufficient evidence to obtain a conviction by a jury of one's peers. That's a very difficult decision to make. You might have your own personal opinion but that's not the way that you can make decisions."

Newman said the case against his client was motivated by the political climate of a White House determined to ease immigration restrictions while still cracking down on overseas theft of American trade secrets.

"The U.S. Attorneys are supposed to be looking for certain kinds of cases and a couple of years ago the alarm went out that they were going to be looking for intellectual property cases, that they were going to toughen up against people that would steal the intellectual property of this country and send it abroad.

"On the side of the government, there was a rush to judgment. There was a desire to make intellectual property cases because that was the policy initiative."

During an appearance in Indianapolis in April, FBI Director James Comey said a main responsibility of his Bureau is to investigate allegations of intellectual property theft directed at significant corporate citizens such as Eli Lilly and Company.

In the Motion to Dismiss, the U.S. Attorney referred to "its on-going evaluation and assessment of this case" as the basis for its decision to drop the charges.

"There's no question that the Lilly Company inadvertently or on purpose,--I suspect inadvertently--gave bad information to the U.S. government and the government, for its part, made its share of errors as well," Newman said.

Newman said ever since the time of the indictment, Li continued to field employment inquiries as industry observers believed that the case would be dismissed.

"I suspect he wants to take a long vacation," said Newman, "if he can afford it."

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