Texas man convicted of trying to steal industrial secrets

A Texas man was convicted Monday (July 29) by a federal jury in Washington D.C. of conspiracy to commit theft of trade secrets.

Following a nine-day trial, Shan Shi, 54, of Houston, Texas, was convicted of one count of conspiracy to commit theft of trade secrets. 

Shi was originally indicted in June 2017 for conspiracy to commit theft of trade secrets, and a superseding indictment containing one count of conspiracy to commit economic espionage and one count of conspiracy to commit money laundering charges issued in April 2018. Shi was acquitted on the other charges.

“The jury’s verdict makes clear that Shan Shi conspired to steal trade secrets by poaching employees from a U.S. company and enticing them to bring technical data to his company,” said Assistant Attorney General for National Security John C. Demers. “He did this against the backdrop of China’s strategic plan to close the gap between China and United States in buoyancy technology and with the benefit of millions of dollars of funding from China."

Evidence introduced at trial established that Shi conspired with others to steal trade secrets from a Houston-based company, Trelleborg Offshore, relating to syntactic foam, a strong, lightweight material with commercial and military uses that is essential for deep-sea oil and gas drilling. 

In public statements of its national priorities, China has made clear its desire to develop this technology. Shi sought to obtain information about syntactic foam for the benefit of CBM-Future New Material Science and Technology Co. Ltd. (CBMF), a Chinese company based in Taizhou, and for the ultimate benefit of the People’s Republic of China. 

Four of Shi’s codefendants—some of whom worked at Trelleborg—had pleaded guilty to conspiring to steal trade secrets, and two testified as cooperating witnesses at trial. From 2014 to 2017, CBMF sent Shi’s company in Houston approximately $3.1 million from China in order to promote Shi’s activity in the United States. 

“We take very seriously the theft of intellectual property that was developed in the United States through long years of research, development, and innovation,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “Shi chose to steal the secrets of a U.S. company rather than do the hard work necessary to succeed honestly in the free market. He is now being held accountable for that choice.”

Sentencing has been set for Oct. 25, 2019.

______________________________________________________________________