Homeless Man Arrested for Theft of Trade Secrets

Reynold Sare Chapin, a homeless man, is being charged with theft of trade secrets. Chapin apparently found advance copies of a Nike 2008 catalog in a dumpster, and he was arrested by FBI agents this week at Portland International Airport and charged under the Economic Espionage Act of 1996.^[1] Jerry Needham, the federal public defender representing Chapin, asserts that Chapin was homeless and may have a history of mental illness.^[2]

The investigation started when Richie Woodworth, president of Saucony Inc., notified Nike that somebody had sent him photocopies of pages showing unreleased Nike products; ''People would die to see what's coming next,'' Woodworth asserted.^[3] Woodworth then sent the unsolicited material he had received to Nike Chief Executive Mark Parker because it contained a claim the material would be sold to the highest bidder and that four CEOs had been offered a crack at it, according to the court documents.^[4] Chapin was identified through an e-mail address included with the material that was traced to an account used at the Multnomah County Library in Portland.^[5]

FBI Special Agent Phil Slinkard then arranged to meet Chapin at the airport in an undercover sting.^[6] ''During our encounter, he showed me some personal items, disclosed that he had obtained the catalogs from the printing and binding shop where he worked and then showed me three Nike 2008 catalogs,'' Slinkard said.^[7]

Theft of trade secrets is covered in 18 U.S.C. § 1832 wherein it states that a) Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly^[8] steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;^[9] without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;^[10] receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;^[11] attempts to commit any offense described in paragraphs (1) through (3);^[12] or (5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.^[13] Any organization that commits any offense described in subsection (a) shall be fined not more than $5,000,000.^[14]

Federal criminal defense attorney Douglas McNabb has previously spoken about the Economic Espionage Act, here.

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^[1] William McCall, Oregon homeless man charged with Nike trade secrets theft, Associated Press Newswire, November 13, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1832(a)(2007).
^[9] Id., at §1832(a)(1).
^[10] Id., at §1832(a)(2).
^[11] Id., at §1832(a)(3).
^[12] Id., at §1832(a)(4).
^[13] Id., at §1832(a)(5).
^[14] Id., at §1832(b).