It is unlikely that the Japan-based executives of Hitachi Ltd. charged with conspiracy to pirate trade secrets from International Business Machine Corp. will be prosecuted by U.S. authorities, a top official of the U.S. Attorney's Office here said today.
Executives of Hitachi and Mitsubishi Electric Corp. were charged Tuesday with paying $648,000 to undercover FBI agents for IBM computer-technology information.
Six men were arrested Tuesday in the case, and the government today announced the arrest of two more suspects, including one who was apprehended as he waited for takeoff aboard a Japan Air Lines flight to Tokyo.
The government's case names eight executives of Hitachi, a large Japanese computer and electronics company, but John C. Gibbons, chief of the criminal division of the U.S. Attorney's Office for the Northern District of California, said today that there is "nothing I am aware of" in extradition treaties between the United States and Japan that would allow U.S. officials to prosecute the Hitachi executives in Japan.
And at a press conference here today, U.S. Attorney Joseph P. Russoniello said that a grand jury has the information gathered in the eight-month investigation. He indicated that the grand jury is looking into information as to whether the charged individuals were working solely on their own behest.
"We haven't drawn any conclusions at this point as to specific intents," he said. "Whether it was all part of a predetermined plan and scheme, whether there is some sort of sinister plot on the other side of the Pacific, I won't say."
Russoniello said the government hopes that the case will bring attention to attempts to stem technology theft.
"The fact that there have been arrests, the fact that the Justice Department is pursuing these cases, should provide some signal to others that may be similarly disposed that we are out there looking for those persons who may be engaged in this kind of nefarious activity," he said.
Late today, Hitachi America, the U.S. arm of the Japanese firm, paid the bail for the Hitachi executives who have been arrested so far. Bail for each had been set at $200,000.
The government broke the IBM case--which it claims to be one of the largest industrial espionage cases ever--following eight months of FBI undercover work that included the setup of a government-operated front company. IBM cooperated in the investigation, providing data that was sold by undercover agents to the suspects, who were told that the information had been stolen from the giant computer company, the government said.
Government affidavits filed in court to obtain the arrest warrants portray a "sting" reminiscent of a detective novel. It allegedly included payments of thousands of dollars for top-secret IBM plans and other data, the demand by an Hitachi official for "presents"--in the form of trade secrets--to take back to Japan, and clandestine meetings in California, Connecticut, Las Vegas and Honolulu.
The affidavits describe how the amount of money being paid for the information escalated as the data became more sensitive, culminating in a $520,000 transaction Tuesday for information on a new IBM computer. Three Hitachi employes were arrested in a suburb of San Francisco Tuesday as they confirmed a wire transfer for $495,000 to complete the deal.
John Giaquinto, the FBI special agent who headed the investigation, said the decision was made to make the arrests Tuesday because IBM, which had been providing data to the government for sale to Japanese businessmen, felt that the latest bundle of information was too valuable for anyone outside the company to keep. Giaquinto said that IBM "had made those items available to us to show in our undercover storefront operation..
According to the affidavits, the money transfers and other payments for the information allegedly were made by Hitachi and Mitsubishi through individuals employed by third-party companies in California. Employes of the go-between companies also have been charged in the case.
In addition to the Hitachi officials arrested Tuesday, three other men, including a Mitsubishi employe, were arrested on similar charges. The government said the Hitachi and Mitsubishi cases were separate parts of the same undercover operation, and the officials of each company allegedly involved apparently did not know that the other also was trying to buy IBM secrets.
The government arrested two other suspects today. One of those arrested, Tomizoh Kimura, an employe of Mitsubishi in Japan, was apprehended by Customs officials aboard a Japan Air Lines jet at San Francisco International Airport.
Kimura was arrested while carrying three reels of computer program tape and other information concerning IBM computers that he allegedly had received from an undercover agent. The other suspect arrested today, Barry Saffaie, was charged with selling several volumes of design workbooks on IBM computers to Hitachi officials last August, an action that touched off the investigation.