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First Foreign Economic Espionage Indictment; Defendants Steal Trade Secrets from Cleveland Clinic Foundation
May 8, 2001
Emily M. Sweeney, United States Attorney for the Northern District of Ohio, today announced that a grand jury sitting in Cleveland, Ohio returned a four-count indictment against Takashi Okamoto and Hiroaki Serizawa, charging them with conspiracy to commit the following violations: The Economic Espionage Act, interstate transportation of stolen property, and making false statements to the government; two counts of violating The Economic Espionage Act; and one count of interstate transportation of stolen property. These are the first charges setting forth violations of The Economic Espionage Act in the United States. Serizawa, age 39, resides in Kansas City, Kansas, while Okamoto, age 40, is believed to reside in Japan.
The indictment charges that Okamoto, from in or about January, 1997, to on or about July 26, 1999, was employed by the Lerner Research Institute (LRI) of the Cleveland Clinic Foundation (CCF) to conduct research into the cause and potential treatment for Alzheimer’s Disease. Serizawa, from on or about December 16, 1996, to the present, was employed by the Kansas University Medical Center (KUMC) in Kansas City, Kansas. According to the Indictment, Serizawa was a close friend and peer of Okamoto from the time they met in Boston, Massachusetts in the mid 1990s. The first count of the indictment charges that Okamoto and Serizawa, from January, 1998, to September, 1999, conspired to misappropriate from the CCF certain genetic materials called Dioxyribonucleic Acid (DNA) and cell line reagents and constructs which were developed by researchers employed by CCF, with funding provided by the CCF and the National Institutes of Health, to study the genetic cause of and possible treatment for Alzheimer’s Disease. Alzheimer’s Disease affects an estimated 4,000,000 people in the United States alone, and is the most common cause of dementia.
The indictment charges that, as an object of this conspiracy, Okamoto and Serizawa, and others known to the grand jury, would and did confer a benefit upon RIKEN, an instrumentality of the government of Japan, by providing RIKEN with the DNA and cell line reagents and constructs which were misappropriated from the CCF. According to the indictment, the Institute of Physical and Chemical Research (RIKEN) was a quasi-public corporation located in Saitama-Ken, Japan which received over 94 percent of its operational funding from the Ministry of Science and Technology of the government of Japan. The Brain Science Institute (BSI) of RIKEN was formed in 1997 as a specific initiative of the Ministry of Science and Technology to conduct research in the area of neuroscience, including research into the genetic cause of, and possible treatment for, Alzheimer’s Disease.
According to the indictment, in or about April, 1999, RIKEN offered and defendant Okamoto accepted a position as a neuroscience researcher to begin in the Fall of 1999. The indictment charges that from on or about the late evening hours of July 8, 1999, to on or about the early morning hours of July 9, 1999, Okamoto and a third co-conspirator known as "Dr. A" misappropriated DNA and cell line reagents and constructs from Laboratory 164, where Okamoto conducted research at the CCF. Also during this time, the indictment charges that Okamoto and Dr. A destroyed, sabotaged and caused to be destroyed and sabotaged, the DNA and cell line reagents and constructs which they did not remove from Laboratory 164 at the CCF. The indictment further charges that, on or about July 10, 1999, Okamoto stored four boxes containing the stolen DNA and cell line reagents at the Cleveland, Ohio home of "Dr. B," a colleague at the CCF, with whom Okamoto was residing temporarily. On or about July 12, 1999, Okamoto then retrieved the boxes of stolen DNA and cell line reagents and constructs from Dr. B’s home and sent them from Cleveland, Ohio by private interstate carrier to defendant Serizawa at Kansas City, Kansas. On or about July 26, 1999, defendant Okamoto resigned from his research position at CCF and, on or about August 3, 1999, started his research position with RIKEN in Japan. Okamoto returned to the United States and, on or about August 16, 1999, retrieved the stolen DNA and cell line reagents and constructs from Serizawa’s laboratory at KUMC, in Kansas City, Kansas. The indictment charges that, before Okamoto left for Japan, he and Serizawa filled small laboratory vials with tap water and made meaningless markings on the labels on the vials; Okamoto instructed Serizawa to provide these worthless vials to officials at the CCF in the event they came looking for the missing DNA and cell line reagents. The indictment charges that on or about August 17, 1999, Okamoto departed the United States for Japan and carried with him the stolen DNA and cell line constructs reagents. The last overt act charged in the conspiracy was that, on or about September, 1999, Serizawa provided materially false, fictitious and fraudulent statements in an interview of him by special agents of the Federal Bureau of Investigation, who were investigating the theft of the DNA and cell line reagents from the CCF.
Count two charges that the defendants committed economic espionage by stealing trade secrets that were property of the CCF, specifically, 10 DNA and cell line reagents developed through the efforts and research of researchers employed and funded by the CCF and by a grant from the National Institutes of Health. Count three also charges a violation of The Economic Espionage Act against Okamoto and Serizawa for, without authorization, altering and destroying trade secrets that were the property of CCF, specifically, DNA and cell line reagents developed through the efforts of researchers employed by and funded by the CCF and by a grant from The National Institutes of Health. The last count of the indictment charges Okamoto and Serizawa with transporting, transmitting and transferring in interstate and foreign commerce, DNA and cell line reagents developed through the efforts of researchers employed and funded by the CCF and by a grant from The National Institutes of Health, knowing that such goods were stolen, converted and taken by fraudulent means.
Conspiracy carries a maximum penalty of five years incarceration and a $250,000 fine, while economic espionage carries a maximum penalty of 15 years incarceration and a $500,000 fine. Interstate transportation of stolen property carries a maximum penalty of 10 years incarceration and a $250,000 fine.
This case is being prosecuted by Robert E. Wallace, Senior Trial Attorney from the Internal Security Section, Criminal Division, U.S. Department of Justice, and Christian H. Stickan, Assistant United States Attorney for the Northern District of Ohio. The case was investigated by the Federal Bureau of Investigation, in Cleveland, Ohio, Kansas City, Kansas, Boston, Massachusetts and New York, New York, with the assistance of the United States Attorney’s Office for the District of Kansas. The investigation is continuing.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.###
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