A scientist is facing charges of stealing secret recipes from a chemistry company and turning them over to his brother-in-law in India, in what authorities said is a crime rarely reported.
It’s the first time authorities filed industrial espionage charges in Utah, said Karl Schmae, a special agent with the FBI’s Salt Lake City office.
Prabhu Mohapatra, 42, worked for Frontier Scientific Inc., a North Logan, UT, chemical company supplies products for research and drug discovery, said its chief executive, Tim Miller. Miller said Frontier is the only company in the world that can make large, pure quantities of an organic chemical that has several applications, from an ingredient in new drugs to solar cells and batteries. The chemical goes by the name 2,2′-dipyrromethane.
“Our knowledge in making these chemicals is really our value,” Miller said. “It’s a compound mostly unique to us. We developed the recipe for large quantities” that can be worth millions of dollars per kilogram.
The federal complaint said Mohapatra emailed the secrets to his in-law, who was setting up an unregistered, competing company in India called Medchemblox. Authorities tracked Mohapatra’s moves on a company computer.
The complaint said Mohapatra had an interest in Medchemblox, and emails released by authorities showed Mohapatra trying to cover his tracks under fear of suspicion.
“Please do not make any product currently present in Frontier Scientific’s catalogue,” Mohapatra wrote on Oct. 29 to his brother-in-law, according to the complaint. “I will lose my job and even could face jail time.”
Miller declined to comment on the potential harm to his company. The federal complaint said Medchemblox intended to undercut Frontier by becoming a supplier for the German chemical company Porphyrin Systems. Schmae said the FBI was investigating the “foreign nexus.”
Mohapatra will plead not guilty at his Dec. 8 arraignment on a count of theft of trade secrets, his public defender Viviana Ramirez said. Police arrested Mohapatra Nov. 14 and released him the same day after appearing in federal court in Salt Lake City. The FBI was holding his passport.
He faces up to 10 years in prison and a $250,000 fine if convicted.
Schmae said industrial espionage is a crime that often goes unnoticed “until you see a competitor showing up with a similar product.” Federal authorities are trying to encourage U.S. companies to report thefts of intellectual property, but many companies handle them internally, afraid the news will lower their company’s stock value or send investors fleeing, he said.
“In some cases, there’s just a lack of awareness that the threat is out there,” Schmae said.
“We’re a small company and we don’t have the stick like the U.S. government,” Miller said. “Quite often when these trade secrets are stolen, there isn’t any recourse for a small company like ours. We didn’t hesitate at all.”