Hilton, Former Execs Probed on Starwood Docs

NEW YORK (Reuters) – A federal grand jury is investigating whether Hilton Worldwide and some of its former executives should face criminal charges for allegedly stealing tens of thousands of pages of confidential documents from rival Starwood Hotels & Resorts (HOT.N), the Wall Street Journal said, citing people familiar with the situation.

The grand jury is part of a six-month-old Justice Department probe into allegations that Hilton, which is owned by private-equity firm Blackstone Group (BX.N), used trade secrets taken by former Starwood executives, who defected to Hilton last year, to develop its own luxury brand to rival Starwood’s W chain.

Federal grand juries review evidence presented by prosecutors to determine whether there is probable cause to return an indictment, the Journal said. At the end of an investigation, prosecutors may decide not to pursue charges.

The Journal said that prosecutors are considering an aggressive approach, possibly bringing criminal charges against Hilton itself, in addition to possible charges against individuals, people familiar with the matter told the Journal.

The investigation, which is being handled by the U.S. attorney’s office in Manhattan, is expected to conclude within the next two months, these people said.

A spokeswoman for the U.S. attorney’s office declined to comment.

The Justice Department’s criminal investigation grew out of a civil lawsuit Starwood filed against Hilton in April alleging two of Hilton former employees stole more than 100,000 electronic documents in “the clearest imaginable case of corporate espionage.” [ID:nN21472635]

Hilton has said the lawsuit is without merit.

Reuters’ efforts to reach Hilton for comment on the report after regular U.S. business hours were unsuccessful. (Reporting by Ilaina Jonas with additional reporting by Ajay Kamalakaran in Bangalore; Editing by Lincoln Feast)