Utahn, Chinese national stole trade secrets from North S.L. sprinkler company, feds allege
NORTH SALT LAKE — A Utah woman and a Chinese businessman stole trade secrets from a worldwide sprinkler manufacturer and supplier based in North Salt Lake, federal authorities allege.
Janice Kuang Capener, 32, and Luo Jun, 36, had a contract with Orbit Irrigation Products Inc., to manufacture some of its products.
A former Orbit employee who ran its factory in Ningbo, China, Capener established California-based Sunhills International in November 2009 to sell sprinklers and irrigation supplies. Jun owns Zhejiang Hongchen Irrigation Equipment Co., an irrigation equipment manufacturer in Taizhou, China.
Orbit fired Capener in May 2009, and on the day she left she accessed "substantial amounts" of sales and pricing information from the company's database, according to an 18-count indictment filed in U.S. District Court. Capener attended school in Salt Lake City and spent six years at Orbit.
The indictment alleges Capener and Jun used the information to price Orbit out of the market. Orbit sells more than 2,000 products in 40 countries. It received a Best of State award in 2007 for production of wholesale goods.
Jun’s company "floated" or provided upfront free irrigation and sprinkler products to Sunhills to market to U.S. retailers, the indictment alleges. It also raised Orbit's manufacturing costs, despite agreements to the contrary.
Because of a dispute over the price increases, Jun and Capener filed a complaint with a state-run Chinese insurance company, resulting in a temporary "blackballing" of Orbit among other Chinese manufacturers, the indictment says. Furthermore, an anonymous complaint was made to Walmart about conditions at Orbit's plant in Ningbo.
Federal authorities say emails between Jun, Capener and others show the sharing of Orbit's proprietary cost, customer and pricing information and arranging to undercut Orbit's prices by marketing products to its customers at lower prices.
Capener, a lawful permanent U.S. resident, and Jun were arrested Friday in Las Vegas where they appeared in federal court. Capener was released but is under federal supervision with GPS monitoring and a curfew. Jun, a Chinese citizen, remains in custody.
They face 18 counts of theft of trade secrets, conspiracy to commit wire fraud and wire fraud.
Each charge of theft carries a maximum prison sentence of 10 years and a fine of $250,000. The conspiracy to commit wire fraud count and each count of wire fraud carry up 30 years in prison and fines of $1 million.
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