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.  

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Update on the Avery Dennison/Four Pillars Criminal Case:

Four Pillars and the Yangs:

As the old saying goes, "Justice delayed is justice denied."  

On July 25, 2003 -- more than six years after the defendants were found guilty of economic espionage -- the trial judge finally re-sentenced the convicted felons to prison terms commensurate with their crimes and the jury verdicts.  But it's unlikely that the sentences will ever be served.

Following a bungled trial by lightweight Justice Department prosecutors and a bizarre initial sentencing by the trial judge that was tantamount to slaps on the wrist and small fines, the two defendants simply packed their bags and went home to Taiwan, where they remain safely ensconced.  Despite being sentenced to prison terms (see below) they will probably never see the inside of a prison as long as they stay outside of the U.S.

A brief recap of this landmark case -- the first to go to trial after the passage of the Economic Espionage Act of 1996 -- follows:

P.Y. Yang, Hwei Chin (Sally) Yang and Four Pillars Enterprises Ltd., of Taipei, Taiwan, were convicted of two counts each of Economic Espionage in Federal Court in Youngstown, Ohio, in April 1997. 

As explained in Sticky Fingers, Federal Judge Peter C. Economous initially (in 1997) imposed the maximum statutory fine of $5 million against the Four Pillars company.  However, in what appeared to be an attempt to punish the victim (Avery Dennison), the judge departed downward fourteen levels from the Federal Sentencing Guidelines when he sentenced the Yangs to essentially short probation, after which, of course, they were free to leave the country.  This was a confused and contradictory sentence that satisfied no one, least of all the interests of justice.

In June 2001, Four Pillars and the U.S. government both argued appeals before the Sixth Circuit Circuit Court of Appeals -- Four Pillars appealing the maximum fine, and the government appealing the incongruity of the extraordinarily light sentences imposed on the Yangs.  

At sentencing, in an unconvincing attempt to justify his baffled thinking, Economous had taken Avery Dennison to task when he said, "In my experience no victim has played a more direct role than Avery in prosecuting a criminal case."  However, it is unclear what "in my experience" actually meant since -- as careful readers of Sticky Fingers will recall -- Economous had virtually no relevant experience going into the trial.  Then, he said "the criminal case has become a tool for Avery to seek vengeance instead of a pursuit of justice." But, there was never any evidence offered to suggest Avery had manipulated the government.  

Economous was clearly wrong, and unfortunately at the expense of Avery Dennison.

The Sixth Circuit agreed and said Avery Dennison had done nothing improper, adding simply and logically that any cooperation Avery provided to the government did nothing to lessen "the Defendants' culpability or the seriousness of their crime."  Then, in a sharp rebuke of Economous, the Appeals Court said it was "at a loss to understand" the muddle-headed sentencing, and went on to say that the "court abused its discretion in departing downward fourteen levels for each defendant."

Accordingly, in its February 2002 opinion, the Sixth Circuit upheld all the convictions but threw out the sentences against each defendant.  The case was remanded back to the District Court for "resentencing consistent with this opinion."  

Click here to read the full decision of the Sixth Circuit Court of Appeals.

Finally, after an 18-month delay, on July 25, 2003, Judge Economous sentenced P.Y. Yang to 51 months in prison and his daughter, Sally, to 24 months.  (Both sentences are to be followed by three years of supervised release.)  

But even though bench warrants were issued for the Yangs' arrest, it is unlikely that they will be carried out.  P.Y. and Sally are in Taiwan and the Justice Department has made no move toward extradition, which would certainly be fought by the Yangs.  It is also unlikely that Taiwan would ever agree to extradition for a crime that that does not exist in that country.  Lacking reciprocal laws on the books, extradition usually fails.

It is obvious that had Judge Economous imposed more appropriate sentences -- meaning prison terms -- in the first place, or even just confiscated their passports, the defendants might have been free on bail or their own recognizance but still have been forced to remain in the U.S. during the lengthy appeal process, and therefore on hand to serve their prison sentences now.  The Judge also reduced the Four Pillars fine from $5 million to $2 million. 

The Justice Department -- none too pleased with this hollow victory -- refused to comment about this debacle. 

This is clearly another instance of justice delayed being justice denied.

Dr. Tenhong "Victor" Lee:

Despite his detailed confession and courtroom testimony detailing eight years of providing some of Avery Dennison's most important trade secrets to Four Pillars, Victor Lee pled guilty to a single count of wire fraud in exchange for immunity on all other possible criminal counts.  He served six months in a  federal halfway house in Youngstown, Ohio.  He then was placed under house arrest for another six months, followed by three years' probation, and full restitution to Avery Dennison of the money he had received from Four Pillars.

(Updated August 2003)

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