Update 

In conjunction with the publication of STICKY FINGERS: Managing the Global Risk of Economic Espionage, this website will endeavor to publish timely updates of current Economic Espionage cases covered in the book.  

---

Update on the Cleveland Clinic Foundation Case:

Another disappointing setback occurred in the government's all-but-dead Cleveland Clinic case at the end of March, 2004: The Japanese High Court refused to extradite the last standing defendant, thereby effectively sending this once promising case to the rubbish pile. This was to have been the government's first ever trial on international economic espionage (Section 1831 of the Economic Espionage Act).

Some background:

Initially there were two defendants accused of stealing DNA used in potentially groundbreaking Alzheimer's research from the famed Cleveland Clinic.  However, in a surprise announcement in May 2002, federal prosecutors dropped all economic espionage charges against defendant Hiroaki Serizawa, in exchange for a guilty plea to one count of making false statements to the government.   

Appearing in Federal Court in Cleveland on May 28, 2003, Serizawa was sentenced to a meager three years' probation, a $500 fine and 150 hours of community service.  He could have been sentenced to a maximum penalty of five years in prison and a $250,000 fine.  Who says crime doesn't pay?

The other defendant, Takashi Okamoto – the researcher who worked at the Cleveland Clinic and who fled the U.S. after the alleged theft – is still securely entrenched in Japan with no apparent plans to return to the United States voluntarily to face criminal charges.  Attempts to extradite him from Japan were being handled by the U.S. Attorney General’s office in Washington, D.C. 

It was that extradition effort that just failed. 

There was never much chance of success since Japan does not have a reciprocal economic espionage law on its books that would have facilitated extradition.  Most foreign nations do not extradite individuals from their countries to face charges in another country if the crime for which the person is being sought is not considered a crime in the country from which the extradition would occur.  Since economic espionage is not a crime in Japan, the Japanese government was unlikely to extradite one of its citizens to face those charges in the U.S. 

Meanwhile, the valuable Cleveland Clinic Alzheimer's research material has never been recovered.  And, due to a highly questionable deal cutting by U.S. prosecutors, now no one will ever stand trial for the theft of truly valuable trade secrets.  That is because the government cut a premature plea bargain with Serizawa before Okamoto was in custody.  Now that Okamoto will not be extradited, the hapless U.S. prosecutors have no options left.

Thus, the government's first case of international economic espionage has dramatically and tragically collapsed.  More than seven years after the EEA was signed into law -- on the heels of Congressional testimony from then-FBI Director Louis Freeh that 23 nations were actively engaged in acts of economic espionage against U.S. businesses -- the government still has failed to secure even one conviction on international economic espionage (Sec. 1831).  This is hardly surprising since only two such cases have ever been filed since 1996.

The false statements Serizawa made to the FBI included understating the number of Cleveland Clinic Foundation vials that Okamoto had stashed at Serizawa's lab at the Kansas University Medical Center in Kansas City, Kansas; denying that he had had any recent contact with Okamoto when in fact he had; and initially denying that he knew that Okamoto had taken a research position with RIKEN in Japan.

To read the local perspective and what frightening signals this case sends to would-be trade secret thieves the world over, read Japanese Judge Scuttles Clinic Spy Case from the Cleveland Plain Dealer.

To read about the failed extradition in an Associated Press story out of Tokyo, click on Tokyo Rejects Extradition of Alleged Spy. 

To read the Cleveland Plain Dealer story on the sentencing of Serizawa, click on Scientist Gets Probation in Clinic Espionage Case.

To read the government's weak attempt to "spin" the Serizawa story, click on the Justice Department's news release Scientist Pleads Guilty to Providing False Statements.

The disappointed and understandably embarrassed Justice Department officials are not saying much about the failed extradition of Takashi Okamoto.

(Updated March 2004)

Economic Espionage | About Lexicon | Protecting Trade Secrets | Client Services | Education & Training
Sticky Fingers | Economic Espionage Case Updates | Speakers Bureau