San Francisco, California - A federal grand jury indicted Xanthe Lam, Allen Lam, John Chan, and James Quach for stealing trade secrets from Genentech and related charges, announced United States Attorney Alex G. Tse and FBI Special Agent in Charge John F. Bennett. The indictment, handed down on October 25, 2018, and unsealed today, alleges that the defendants stole confidential Genentech information to help a company in Taiwan create and sell drugs similar to those that were created by Genentech.
According to the indictment, Xanthe Lam worked for Genentech as a Principal Scientist from 1986 until 2017. Her husband, Allen Lam, and James Quach, both were former Genentech employees who, along with John Chan, became consultants for JHL Biotech, Inc. JHL is a company based in Zhubei, Taiwan, that develops “biosimilars.” Biosimilars are roughly the equivalent of a “generic” chemical drug, i.e., designed to have properties similar to a biopharmaceutical that previously was approved by a regulatory agency, such as the Food and Drug Administration. The indictment alleges Xanthe Lam conspired with Allen Lam and John Chan to steal the company’s trade secrets related to biopharmaceuticals Pulmozyme, Rituxan, Herceptin, and Avastin. Xanthe Lam allegedly downloaded, collected, and transferred to Allen Lam and others at JHL certain confidential Genentech documents relating to the processes by which the company formulated drugs and managed raw materials. Xanthe Lam also allegedly secretly consulted for JHL while still employed at Genentech.
The indictment also alleges that Xanthe Lam conspired with former Genentech employee James Quach to illegally use her computer credentials. Specifically, she allowed Quach to gain access to Genentech’s secure document repository and, once he had access to the repository, Quach stole the company’s proprietary manufacturing protocols.
In sum, the Indictment charges the defendants with the following crimes and, if found guilty, they are subject to the following maximum statutory penalties:
|
Defendant |
Age/Residence |
Charges |
Maximum Penalties |
|---|---|---|---|
|
Xanthe Lam |
66/ South San Francisco, Calif. |
18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets
18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet
18 U.S.C. § 1030(b) – Conspiracy to Commit Computer Fraud and Abuse
18 U.S.C. § 1030(a)(2)(C) and 2 – Computer Fraud and Abuse, Aid & Abet |
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture |
|
Allen Lam |
68/ South San Francisco, Calif. |
18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets
18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet
|
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture |
|
John Chan |
29/ San Francisco, Calif. |
18 U.S.C. §§ 1832(a)(5) – Conspiracy to Commit Theft of Trade Secrets
18 U.S.C. §§ 1832(a) and 2 – Theft of Trade Secrets, Aid and Abet
|
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture |
|
James Quach |
58/ Daly City, Calif. |
18 U.S.C. § 1030(b) – Conspiracy to Commit Computer Fraud and Abuse
18 U.S.C. § 1030(a)(2)(C) and 2 – Computer Fraud and Abuse, Aid & Abet |
Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture
Five years of imprisonment; $250,000 fine, three years of supervised release, $100 special assessment, forfeiture |
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. In addition, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The defendants were all arraigned this morning before U.S. Magistrate Judge Joseph C. Spero. All defendants pleaded not guilty and were released on bond. Magistrate Judge Spero scheduled the defendants’ next district court appearance for November 13, 2018, before U.S. District Judge William Alsup. Quach also will appear on November 2, 2018, before Magistrate Judge Spero for identification of counsel.
Assistant U.S. Attorneys Matthew A. Parrella and Michelle J. Kane are prosecuting the case with the assistance of Elise Etter and Rebecca Shelton. The prosecution is the result of an investigation by the FBI.