Former Boston Scientific engineer to be sentenced for stealing trade secrets

Aaron Q. Khieu admits it — he stole the secret design for a new medical device called the Mustang Plus from the Maple Grove offices of Boston Scientific Corp.

But Khieu, 44, argues the plans were worthless to him, and therefore the dedicated family man should get house arrest and probation when he's sentenced Wednesday morning for the crime. Federal prosecutors say Khieu ripped off his former employer for the entire $4.3 million it spent designing the device, an abuse of trust that should send him to prison for at least five years.

The question of whether the design specs for the Mustang Plus had any real value will be a major factor in deciding whether the medical-device engineer will go to prison or go home after the sentencing in federal court in Minneapolis. The value of a secret is an important legal concept in a state like Minnesota, which is rich with high-tech design labs and engineers carrying thumb drives.

"This is a question that comes up in every trade secret case," said Minneapolis intellectual property attorney Ron Schutz, who is not involved in the Khieu case. "It's going to be a highly fact-intensive inquiry, which is the general nature of fighting over trade secrets to begin with."

The Mustang Plus was designed to be a balloon catheter that could be inserted in a patient's artery and precisely inflated to push aside plaque blocking a blood vessel.

Its specialized tip was supposed to push aside obstructions and restore blood flow better than other balloon catheters on the market, including Boston Scientific's older-generation balloon catheters, court records say.

Boston Scientific last year received approval to sell a device called the Mustang balloon catheter, which incorporates the Mustang Plus technology.

A company spokesman on Tuesday declined to comment on the case against the former employee.

Khieu never made a device from the stolen plans, but last year he was charged with 14 counts of trade secret theft and wire fraud.

In April, he pleaded guilty to one count of theft for downloading a PDF of the Mustang Plus balloon mold on Oct. 8, 2012. The remaining charges are expected to be dismissed at Wednesday's sentencing hearing.

Court documents portray Khieu (pronounced "cue") as a complicated figure.

He was born in war-torn Vietnam, where as a grade-schooler he earned money selling goods on the street because his father had been imprisoned "for assisting the United States in their efforts in Vietnam," according to the sentencing memo from his defense attorney.

Khieu was a smart student, entering medical school directly from high school and then learning English in a single year so that he could gain accepted into the chemical engineering program at the University of Minnesota.

He met his future wife at the U, where they served as president and vice president of the Vietnamese Student Association.

Letters from Khieu's family and friends describe him as a devoted supporter of his parents, who live with him in Maple Grove, and of his wife and three daughters.

"From his youngest daughter holding his T-shirt when she sleeps, to his commitment to never miss one of their soccer games whether they are 'one mile or 200 miles from home,' Mr. Khieu has found purpose and meaning in spending his time developing a close relationship with his daughters; one that even his wife observes establishes him firmly as the primary parent," Khieu's sentencing memo says.

Khieu was hired at Boston Scientific as an engineer of vascular devices in 2002. He worked on earlier versions of the Mustang catheter, and served on the design team for the Mustang Plus.

Khieu's former supervisor told investigators that Khieu would have had most of the design information for the device in his memory, without any stolen secret documents.

Yet prosecutors say Khieu stole hundreds of digital files on thumb drives, in October 2012 and again in June 2013.

Between those dates, prosecutors say, Khieu traveled to Vietnam in an attempt to set up a manufacturing site for an advanced balloon catheter he planned to call "Snowcat," which included elements of the stolen Mustang Plus design. He intended to sell the Snowcat in the United States and Vietnam, which could have put him in competition with Boston Scientific.

After the trip to Vietnam, Khieu met with potential investors in Minnetonka, and e-mailed potential investors a plan for a balloon-catheter company he intended to call Snowflake Medical, using the stolen trade secrets, prosecutors say.

One of those e-mails was sent to a person who worked at a competitor of Boston Scientific that sold medical devices in Vietnam, according to the October 2014 indictment.

"The defendant, in a nutshell, stole U.S.-developed high technology, and had every intention of taking it to a foreign country," prosecutors wrote in their sentencing memo for Khieu. "The government emphatically believes that a sentence would be wholly inappropriate if it did not include as one of its components a significant period of incarceration."

Khieu admits to downloading the files, but argues that the Snowflake Medical business plan was "a pipe dream" and no device was ever produced. "There is simply no evidence that Mr. Khieu intended to inflict a loss in the amount of $4.3 million on Boston Scientific," his sentencing memo says.

The suggested punishment in Khieu's case is driven largely by what the judge decides the amount of the intended loss was, court records say, though U.S. District Judge Patrick J. Schiltz also has the power to depart from the sentencing guidelines if he wants.

Minneapolis intellectual property lawyer Marla Butler said it seemed odd to her that a company's research spending would be used as the loss amount, since the company still has the information.

But she noted that the sentencing judge can use subjective judgment in deciding what damage Khieu intended to inflict on his employer.

"If [Khieu] in his 'pipe dream' world were to intend to make millions and millions of dollars on a product where many of the sales would otherwise have gone to Boston Scientific, then I think the government gets to consider that as the intended loss," she said.

Joe Carlson • 612-673-4779

Twitter: @_JoeCarlson