The United States Attorney's Office for the Northern District of California announced that Rusty McDowell, 38, formerly of Burlingame, California, was sentenced yesterday to 24 months imprisonment and 12 months community confinement following his convictions in November of 2002 of eight felony counts arising from the misappropriation of confidential parts drawings from Applied Materials, Inc.  The sentence was imposed by United States District Judge Ronald M. Whyte, sitting in San Jose.  Judge Whyte also ordered McDowell & Company, Inc., a family-owned business formerly based in San Carlos, California, to serve a term of three years probation and to pay a fine of $750,000. 

The indictment had charged Mr. McDowell and McDowell & Company (collectively, "McDowell") with engaging in a scheme to defraud Applied Materials, a Santa Clara corporation, by secretly obtaining Applied Materials semiconductor parts drawings from a former Applied Materials employee and then using the drawings to have spare parts manufactured without the permission of Applied Materials.  The jury found, as part of the scheme, that McDowell transmitted parts drawings to manufacturers and then, after receiving the manufactured parts, marketed them directly to Applied Materials' customers.

The court's sentence against Rusty McDowell included an order that he serve 24 months in federal prison, to be followed by a three year term of supervised release.  As a condition of supervised release, Judge Whyte ordered Mr. McDowell to serve an additional 12 months in a community confinement center, or "halfway house."   Community confinement permits the prisoner to work during the day but requires that he spend the night at the facility.  Mr. McDowell was also ordered to pay a fine of $25,000.   The $750,000 fine against McDowell & Company was ordered to be paid in six equal installments during the three year period of probation.

The sentenced followed an 18-month investigation by agents of the Federal Bureau of Investigation and a six week trial.  Jeff Nedrow and David Callaway were the Assistant U.S. Attorneys  who prosecuted the case with the assistance of Susan Kreider and Tracey Andersen.

All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181.