Cree accuses employee of stealing secrets worth more than $100 million

Coy Bell, 47, is accused of trying to steal computer files from Cree Inc. authorities say could give a competitor or “foreign entity” a leg up in duplicating something the company’s been working on for 30 years.
Coy Bell, 47, is accused of trying to steal computer files from Cree Inc. authorities say could give a competitor or “foreign entity” a leg up in duplicating something the company’s been working on for 30 years. Durham County Sheriff's Office

An attempted theft at Durham manufacturer Cree in May could have given “a competitor or foreign entity” copies of 32,000 files that covered virtually all there is to know about something the company’s been working on for 30 years, a Durham County Sheriff’s office search warrant says.

The warrant sought the cell-phone records of Coy Brevard Bell, a 47-year-old Cree staffer arrested by authorities on June 18 and charged with larceny by an employee.

Det. Cpl. R. Hooks procured the search warrant on July 6 and returned it to court clerks on Monday. His probable-cause affidavit told Superior Court Judge Jim Hardin that investigators think it’s “doubtful that Mr. Bell could have single-handedly utilized the information for personal gain.”

It’s thus “probable that he conspired with another entity, business or government,” Hooks said.

Founded in 1987, Cree is famously one of the companies that pioneered the development of LED lighting as a replacement for the incandescent light bulb.

But the company also makes chips and other electronic components for radio-frequency and power-supply applications. One of its subsidiaries, Wolfspeed, operates one of the 75 or so manufacturing lines the U.S. Department of Defense considers a “trusted foundry” for custom electronics.

Company officials and outside observers say it’s likely the presence of the DOD-accredited foundry sparked the objections from the federal government’s Committee on Foreign Investment in the United States that last year sank the proposed sale of Wolfspeed to a German electronics firm.

‘Highly confidential’ files

The investigation began on the afternoon of May 4, when a Cree employee or contractor found a microSD portable memory card laying “on or near” a sidewalk on the Cree campus, according to the affidavit. Such cards “are typically forbidden” at Cree and the person who found it turned it over to company security and IT staffers.

The card had on it “highly confidential” files covering “virtually every aspect of a process which was developed over the past 30 years with hundreds of millions of dollars’ worth of investments,” Hooks told the judge.

Cree’s IT staff “determined that the files were downloaded” onto the card from Bell’s work computer, Hooks said, without specifying what Bell’s job was at the company.

Surveillance video and other records show that Bell was at his cubicle desk at 12:27 p.m. on May 4, with no one else around at the time. He placed the microSD card into his computer and transferred the files, Hooks alleged.

Bell left at 2:40 p.m. and was last seen “walking outside, on a sidewalk in the general area” where the microSD card was found.

Further investigation found that in February and March, Bell “with permission and [for] business purposes” had transferred from one part of Cree’s in-house computing system to another files about an “LED manufacturing process,” Hooks said.

The warrant didn’t say whether the LED files or those for some other process were the ones on the mircoSD card.

But the February and March transfers “would have allowed Bell to know the location of the [LED] files, their content and possible value to a competitor or foreign entity,” according to the affadavit.

Bell wasn’t authorized to have the files that were found on the microSD card, or to have any electronic storage devices on campus, Hooks said.

When questioned on May 29, Bell admitted the February and March file transfers, and that he knew he wasn’t supposed to have digital storage devices at work. Investigators showed him the video. He identified himself and his desk, but “denied stealing the digital information.”

‘Constantly under attack’

In the wrong hands, the files would supply “any and all the information they would need to set up a lab in a matter of weeks instead of decades,” Hooks said, adding that Cree “is constantly under attack” by hackers and that it’s had “previous incidents of employees selling” or giving “confidential information to competitors or foreign entities.”

Hooks arrested and jailed Bell, who’s from 5705 Bonnie Drive, Durham, on June 18. The separate arrest warrant said Cree believes the files are worth more than $100 million.

Court records indicate that Bell’s secured bond was initially set at $50,000. On June 19, it was raised to $150,000 secured. Bell posted bail and left custody on June 20.

Bell’s lawyer, Hart Miles, from the Raleigh firm Cheshire Parker Schneider & Bryan, said he hopes to meet with Durham prosecutors before his client’s next scheduled court date in September.

“Our hope is that we’re going to be able to establish that this was a misunderstanding,” Miles said. “This man has been an employee of Cree for a long time and has been very loyal to them. We expect to be able to show to them and the prosecutor that this was a conclusion not based on a complete picture of what happened.”

He added that the cell-phone records are “something I would have expected and hoped they would have looked at before issuing an arrest warrant.”

As for Cree, the company “does not comment on ongoing investigations,” spokeswoman Tori Montano said.

Durham sheriff’s office spokeswoman AnnMarie Breen said the investigation is continuing and detectives “are being assisted by multiple other agencies” in law enforcement.

The search warrant for Bell’s cell phone indicated that the sheriff’s office was expecting help from the SBI, the FBI and possibly the U.S. Secret Service.

Hooks told Judge Hardin that authorities were looking not just for the records of Bell’s calls and texts, but tracking information recorded from GPS and other sources that would show where the phone linked to the account has been, and the history of any internet use.

Staff reporter Virginia Bridges contributed to this story.

Ray Gronberg: 919-419-6648, @rcgronberg