SAN FRANCISCO – Former Genentech Principal Scientist Xanthe Lam, and her husband Allen Lam, pleaded guilty to conspiracy and other charges related to the theft of trade secrets from Genentech for use by other companies, announced Acting United States Attorney Stephanie M. Hinds, Internal Revenue Service ̶ Criminal Investigations, Special Agent in Charge Michael Daniels, and Federal Bureau of Investigation, Special Agent in Charge Craig D. Fair. The pleas were accepted by the Honorable William Alsup, United States Senior District Judge.
According to the plea agreements filed yesterday and made public today, both Xanthe Lam and Allen Lam conspired to commit theft of trade secrets by stealing confidential, proprietary, and trade secret information from Genentech. Specifically, starting in 2009, Xanthe Lam, an experienced and accomplished scientist then working at Genentech, and her husband, Allen Lam, worked as a team to purloin confidential information from within Genentech and to pass the information on to a number of scientists working for Genentech’s competitors. For example, beginning in 2013, Xanthe Lam secretly provided Genentech’s high-quality, confidential, intellectual property to help JHL Biotech, Inc., a biopharmaceutical start-up headquartered in Zhubei, Taiwan, with offices in Wuhan, China, and Rancho Santa Fe, Calif., to cut corners, reduce costs, solve problems, save time, and otherwise accelerate product development timelines. Within JHL Biotech, employees were told to refer to Xanthe Lam as “Allen Lam” and email Xanthe Lam using the email address for Allen Lam to conceal the work Xanthe Lam was doing for the company.
In addition to the conspiracy charge, Xanthe Lam pleaded guilty to one count of conspiracy to commit computer fraud and abuse, one count of conspiracy to make false statements to a government agency, and one count of making false statements to a government agency. Allen Lam also pleaded guilty to four counts of filing false tax returns and one count of conspiracy to make false statements to a government agency.
Judge Alsup accepted the Lams’ guilty pleas and ordered the case adjourned until November 9, 2021, at 1:30 p.m.
The court also may order additional assessments, forfeiture, and restitution; however, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Following nearly three years of cooperation with the government and remedial efforts in connection with its investigation of thefts of trade secrets and wire fraud, JHL Biotech, Inc., now called Eden Biologics, Inc., and Chime Biologics (Wuhan) Co. Ltd., entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office, Northern District of California.
“Defendants Xanthe Lam and Adam Lam have admitted that they used confidential documents and trade secrets stolen from Genentech to aid competitors,” said Acting United States Attorney Hinds. “This United States Attorney’s Office will always aggressively prosecute theft of corporate trade secrets to protect innovation, a crown jewel of our District.”
“Mr. Lam received compensation for his consulting work and failed to report the income he earned for several years on his U.S. Individual Income Tax Return (Form 1040),” said IRS Criminal Investigations, Acting Special Agent in Charge Michael Daniels. “The overarching principle of IRS’ enforcement strategy is simply this: We protect the integrity of the tax system by ensuring everyone pays the right amount of tax.”
“The FBI will not tolerate the stealing of intellectual property and trade secrets to gain an advantage in the private sector,” said FBI Special Agent in Charge Craig D. Fair. “This behavior is contradictory to American values and with our law enforcement partners, we will continue to pursue those who wish to make their profits off the backs of other’s hard work.”
Assistant U.S. Attorneys Sheila A.G. Armbrust, Adam A. Reeves, and Claudia A. Quiroz are prosecuting the case with the assistance of Beth Margen and Morgan Byrne. The prosecution is the result of an investigation by the Internal Revenue Service ̶ Criminal Investigations and the Federal Bureau of Investigation.
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