Trade secret theft is not only a civil wrong. The Economic Espionage Act of 1996 (EEA) made it a federal felony, codified at 18 U.S.C. §§ 1831 to 1839. It is the criminal half of the same body of law that gives owners a civil suit, and the Justice Department, not the owner, decides whether it gets used.
The Act draws one line that controls everything else: who was the theft meant to benefit. If the answer is a foreign government or something it controls, the charge is economic espionage under § 1831. If the answer is anyone else, including a domestic competitor or the thief himself, the charge is ordinary theft of trade secrets under § 1832. Same conduct, different statute, very different sentence.
Section 1832 is the workhorse. It reaches anyone who knowingly steals, copies, downloads, transmits, receives, or possesses a trade secret without authorization, where the secret is related to a product or service used in or intended for interstate or foreign commerce, with intent to convert it to the economic benefit of anyone other than the owner and knowing that the offense will injure the owner. This is the departing engineer who walks out with the source code, the supplier who copies a customer’s process.
Section 1831 adds one element and multiplies the consequences. The government must prove the defendant intended or knew that the offense would benefit a foreign government, foreign instrumentality, or foreign agent. “Instrumentality” is defined broadly in § 1839 to include entities substantially owned, controlled, sponsored, commanded, managed, or dominated by a foreign government, which is how state-linked companies fall inside it.
Both sections criminalize attempt and conspiracy on the same terms as the completed act. That matters more than it sounds. A sting that ends before any secret changes hands is still a chargeable case, which is why several of the marquee prosecutions involve defendants who never actually obtained the material.
Under § 1831 an individual faces up to 15 years and a fine up to $5 million. An organization faces the greater of $10 million or three times the value of the stolen trade secret, including the cost of research and design and the cost of reproducing it, a figure Congress raised in the Foreign and Economic Espionage Penalty Enhancement Act of 2012 (Pub. L. 112-269), which also lifted the individual fine from $500,000 to $5 million.
Under § 1832 an individual faces up to 10 years, with the fine set by the general provision at 18 U.S.C. § 3571. An organization faces the greater of $5 million or three times the value, a ceiling the Defend Trade Secrets Act of 2016 lifted from a flat $5 million.
Forfeiture under 18 U.S.C. § 1834 is not optional. Section 1834 routes forfeiture, destruction, and restitution through 18 U.S.C. § 2323, which directs the court to order forfeiture of any proceeds of the offense and of property used, or intended to be used, to commit it. Walter Liew, convicted of conspiring to deliver DuPont’s chloride-route titanium dioxide technology to Chinese state-owned Pangang Group, was sentenced in 2014 to 15 years and ordered to forfeit $27.8 million plus $511,667.82 in restitution. In United States v. Liew, 856 F.3d 585 (9th Cir. 2017), the Ninth Circuit affirmed the EEA convictions but reversed the obstruction of justice and witness tampering counts and remanded for resentencing, and Liew was resentenced in October 2018 to 144 months. Restitution to the victim runs alongside forfeiture and is calculated separately.
Prosecutors lose the espionage count far more often than the theft count, and the reason is the foreign-benefit element. Intent to benefit a foreign state has to be shown with evidence, not inferred from the defendant’s nationality or from the fact that the material ended up abroad.
The Motorola case is the standard illustration. Hanjuan Jin was stopped at O’Hare in February 2007 with over a thousand proprietary Motorola documents, more than $31,000 in cash, and a one-way ticket to China. After a bench trial in 2012 a federal judge convicted her of theft of trade secrets under § 1832 but acquitted her of economic espionage under § 1831, finding the evidence did not establish beyond a reasonable doubt that she intended or knew her conduct would benefit the People’s Republic of China. She received four years.
The contrast is United States v. Xu, where the government had the element cold. Yanjun Xu was a serving officer of China’s Ministry of State Security, extradited from Belgium in 2018 and convicted in 2021 of conspiracy and attempt to commit economic espionage aimed at GE Aviation’s composite fan blade technology. He was sentenced in November 2022 to 20 years, the sentence reflecting multiple counts. He was the first Chinese intelligence officer ever extradited to the United States to stand trial.
The EEA has been patched twice in ways worth knowing. In United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012), the Second Circuit threw out a Goldman Sachs programmer’s conviction because the high-frequency trading source code he took was used internally and was not itself “produced for or placed in interstate or foreign commerce” as § 1832 then required. Congress rewrote the clause within months in the Theft of Trade Secrets Clarification Act of 2012, so the statute now covers secrets “related to a product or service used in or intended for use in” commerce. The 2016 DTSA then bolted a private civil cause of action onto the same chapter at § 1836(b), which is why civil and criminal trade secret law now share a single definition of “trade secret” in § 1839(3).
Enforcement policy has swung. The Justice Department launched the China Initiative in November 2018 to concentrate resources on Chinese state-sponsored economic espionage. It generated real EEA convictions and also considerable criticism, including cases where the charges filed were grant fraud or false statements rather than trade secret theft at all. The Department ended the initiative on February 23, 2022, folding the work into a broader threat-country approach. The statutes did not change. The branding and the case-selection framework did, and EEA prosecutions of state-linked theft continue.
A trade secret owner cannot prosecute anyone. You can refer a case to the FBI or a U.S. Attorney’s Office, hand over your forensics, and cooperate, but charging is entirely the government’s call and declination is common. Understand what you are trading away when you refer.
The practical sequence for most owners is the reverse of what people assume: move first on the civil side for the temporary restraining order and preservation, and treat a referral as a parallel step, not a substitute.
Is stealing a trade secret a federal crime? Yes. The Economic Espionage Act of 1996 created two federal crimes. 18 U.S.C. § 1832 covers theft of a trade secret related to a product or service in interstate or foreign commerce, for the economic benefit of someone other than the owner. 18 U.S.C. § 1831 covers the same conduct when it is intended to benefit a foreign government, instrumentality, or agent. Both reach attempts and conspiracies, not just completed thefts.
What is the difference between 18 U.S.C. 1831 and 1832? The difference is who benefits, and it is the government’s burden to prove. Section 1831 is economic espionage and requires intent or knowledge that the theft will benefit a foreign government or its instrumentality or agent. Section 1832 is ordinary commercial theft and requires only intent to benefit someone other than the owner and intent or knowledge of injury to the owner. Section 1831 carries roughly 50 percent more prison exposure and much larger fines.
What are the penalties under the Economic Espionage Act? Under § 1831 an individual faces up to 15 years in prison and a fine up to $5 million, and an organization faces a fine of the greater of $10 million or three times the value of the stolen secret. Under § 1832 an individual faces up to 10 years, and an organization faces the greater of $5 million or three times the value. Criminal forfeiture of proceeds and of property used to commit the offense is mandatory under 18 U.S.C. § 1834.
Can a company force a criminal prosecution for trade secret theft? No. Only the Justice Department decides whether to charge, and a company can only refer the matter and cooperate. Referral also has costs: prosecutors control the pace, a defendant in a parallel civil case may invoke the Fifth Amendment and seek a stay of your civil suit, and the criminal case aims at punishment rather than at the injunction or damages you may actually want.
Going further: Trade Secret Misappropriation, what to do .
This page is general legal information, not legal advice, and it does not create an attorney-client relationship.
The Second Circuit upheld EEA and NSPA convictions because a trader stole code on paper, distinguishing Aleynikov and exposing gaps Congress later closed.
The Third Circuit's Taxol sting ruling holds attempt and conspiracy under the Economic Espionage Act need no actual trade secret, so stings can use decoys.
A star self-driving engineer downloaded 14,000 Google files, jumped to Uber, and pleaded guilty to one count of trade secret theft, drawing 18 months before a presidential pardon.
How a former Boeing engineer with 300,000 stashed documents became the first person convicted at trial of economic espionage for China, and what the Ninth Circuit affirmed.
A Coca-Cola chemist's theft of $120 million in BPA-free coating formulas produced one of the rare convictions under the Economic Espionage Act's foreign-government provision, and a Sixth Circuit opinion clarifying what the government must prove.
A California consultant who sold DuPont's chloride-route titanium-dioxide process to Chinese state firms became the first defendant convicted by a jury under the economic-espionage section of the EEA. The Ninth Circuit affirmed those counts, but reversed two obstruction-related convictions and vacated his sentence.
A former Motorola engineer caught at O'Hare with stolen telecom secrets was convicted of trade-secret theft but acquitted of economic espionage, illustrating how hard it is to prove intent to benefit a foreign government.
The Second Circuit reversed a Goldman Sachs programmer's criminal conviction because the company's high-frequency trading code was not a product 'produced for or placed in' commerce, exposing a gap Congress closed within months.
