HOUSTON — A Houston man was convicted Tuesday by a federal jury of conspiracy to commit theft of trade secrets following a nine-day trial.
Shan Shi, 54, 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.
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.
Prosecutors said 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 China.
Four of Shi’s co-defendants, 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.
“Shan Shi and his co-conspirators went to great lengths to cash in on the Chinese government’s desire to obtain syntactic foam technology,” Assistant Attorney General Brian A. Benczkowski, of the Justice Department’s Criminal Division, said in a press release. “As this case demonstrates, the Department of Justice is and will remain on the front lines of defending U.S. companies against the theft of their trade secrets.”
John C. Demers, assistant attorney general for National Security, said in a press release Shi conspired to steal trade secrets by poaching employees from a U.S. company and enticing them to bring technical data to his company.
“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,” he said.
U.S. Attorney Jessie K. Liu for the District of Columbia said their office takes the theft of intellectual property very seriously.
“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,” Liu said. “He is now being held accountable for that choice.”
Assistant Director John Brown of the FBI’s Counterintelligence Division said Shi attempted obtain sophisticated U.S. technology with both military and civilian uses.
“It is no secret that China is determined to achieve superiority in virtually all high-tech areas, and the FBI is equally determined to stop individuals who commit illegal acts to help China achieve its goals,” Brown said. “The stakes are high both for U.S. national security and for American companies who invest so much money and time on research and development.”
Sentencing has been set for Oct. 25, 2019.
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