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NJ Man Charged with Fraud and Theft of Trade Secrets

An employee of a privately-held corporation that distributes “As Seen On TV” products was arrested today and charged with theft of trade secrets and wire fraud, U.S. Attorney Paul J. Fishman announced.

Ralph Mandil, 37, of West Long Branch, New Jersey, was arrested by special agents of the FBI following a two-month sting operation in which he offered to sell to undercover agents inside information about his employer’s business. He is charged by complaint with one count of theft of trade secrets and one count of wire fraud.

According to documents filed in this case and statements made in court:

The products sold by Mandil’s employer (Victim 1) include electrical and non-electrical appliances, beauty and personal care, pet care, fitness, auto and outdoor products, which are frequently marketed via television ads and are commonly sold at large retailers such as Walmart, generating substantial annual revenues.

Between Aug. 1, 2016, and Oct. 12, 2016, Mandil allegedly exchanged emails, phone calls and held meetings with people he believed were representatives of a New Jersey-based competitor of Victim 1. The individuals he was communicating with were, in fact, government agents outfitted with audio/video recording devices.

Throughout those communications, Mandil allegedly offered to provide the agents with proprietary trade secrets belonging to Victim 1, including unreleased product names, specifications, artwork, advertising, market data, manufacturing and other information, in addition to providing them with access to Victim 1’s “drop box,” or cloud storage account, in exchange for $197,500.

Mandil also allegedly provided the government agents with samples of the merchandise and trade secrets he could steal from Victim 1. During those exchanges Mandil confirmed that the proprietary information he was selling was worth “millions.”  In exchange for these samples, Mandil was paid $10,000.

Law enforcement confirmed that if a competitor was able to preview this information before Victim 1 could release a product to the public, the competitor could use the market data and other proprietary information to obtain a tactical advantage over Victim 1 in the marketplace. A competitor could steal Victim 1’s product designs, undercut its prices and push competing products to retailers before Victim 1.  Victim 1’s representatives estimated that the proprietary information Mandil was offering to sell was worth tens of millions of dollars in revenue to Victim 1 and its competitors.

The theft of trade secrets count with which Mandil is charged carries a maximum potential penalty of 10 years in prison. The wire fraud count with which Mandil is charged carries a maximum potential penalty of 20 years in prison.