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Andrew Blum, 63, pleaded guilty on Tuesday, Nov. 12 to conspiracy to possess stolen trade secrets and possession of stolen trade secrets, New Jersey's U.S. Attorney Philip Sellinger said in a news release. Blum was the vice president of product development for an unnamed North Jersey-based maker of oil products and proprietary flavors from 2013 until Wednesday, Dec. 12, 2018.
The parent corporation of Blum's company was one of the world’s largest producers of oils, juices, peel and byproducts. It was also a leading manufacturer of proprietary flavors sold to the world’s largest beverage companies.
According to court documents and statements, the company's IT team learned in December 2018 that another employee used a personal email account to forward 82 files with trade secret information to Blum's personal email. The files included virtually every formula used in Blum's department.
The company said Blum and his coworker improperly accessed formulas despite not working on them. One stolen secret formula was for "one of the most recognizable names in the global soft drink industry."
Investigators recovered more trade secrets from Blum's home and cloud storage account. The evidence included handwritten notes for a product the company makes that's sold by an Asia-based beverage maker that's one of the largest soda companies in the world.
Other personal emails showed Blum and his coworker planned to leave the company to work for competitors.
"A company’s intellectual property – its proprietary materials and trade secrets – have enormous value to the companies that develop them, sometimes constituting their most valuable assets," Sellinger said. "Stealing them is a crime. This defendant admitted stealing trade secrets, including a secret formula used in one of the most recognizable names in the global soft drink industry. Our office will prosecute cases like this with the same vigor as any other theft."
"Blum admits he stole his employer's trade secrets and hoped to use the information so he could get a job across the street," said Nelson Delgado, Acting Special Agent In Charge for the FBI office in Newark. "Protecting the proverbial keys to the castle is essential for companies to remain in business and stay competitive. It’s even common for corporations to house formulas and recipes in literal vaults to keep them from being stolen.
"One of the FBI’s priorities is protecting companies from these types of crimes and holding accountable anyone who tries to sneak out the back door."
Blum faced up to 20 years in prison on the two charges. He could also be fined up to $250,000 or twice the gain or loss from the crime, whichever is larger.
Sentencing was scheduled for Thursday, Mar. 20, 2025.
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