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Former HTC staffers charged with fraud, leaking company secrets

Five fingered in Sense-stealing scheme

Internet Security Threat Report 2014

Five former HTC employees, including one former executive, have been charged in a Taiwanese court with leaking corporate secrets, accepting illegal kickbacks, and falsifying expenses.

According to the Wall Street Journal, Thomas Chien, formerly VP of product design at HTC, has been charged with leaking details of a future smartphone interface design, believed to be version 6.0 of the company's Sense software for Android.

In addition, prosecutors allege that Chien and his collaborators profited to the tune of 33.6 million New Taiwanese dollars ($1.12m) by accepting kickbacks from suppliers and charging fake expenses back to HTC.

Chien was arrested in August along with two others, but the latest reports say a total of five ex-HTC employees have been charged, as well as three employees of HTC suppliers who participated in the scheme. The suppliers were not named.

Each charge of leaking secrets and betrayal of trust could carry a maximum sentence of 10 years in prison, prosecutors say.

The incident comes at a delicate moment for HTC. The Taiwanese firm's smartphone sales are slumping and a steady parade of its top execs sought greener pastures throughout 2013. It has also suffered damaging defeats in patent lawsuits brought by Nokia in both the US and the UK.

In October, HTC CEO Peter Chou said that he would unload some of his duties to subordinates so that he could concentrate more on producing innovative products.

For the time being, however, much depends on the upcoming launch of the successor to HTC's flagship Android smartphone, the HTC One. That device, dubbed the HTC One Two for want of an official moniker, is expected to launch sometime in the first quarter of 2014, and HTC badly needs it to be a success.

HTC declined to comment on the charges filed against Chien and his cohorts, offering only a repeat of the same statement it gave earlier this year, to the effect that it does not condone any violation of its policies. ®

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