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IN THE UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF COLUMBIA

IN THE MATTER OF AN APPLICATION ) Case No. _____


FOR CRIMINAL COMPLAINT FOR )
SHAN SHI; )
KUI BO; )
GANG LIU; )
SAM OGOE; )
UKA UCHE; )
HUANG HUI; and )
JOHNNY WAYNE RANDALL )

AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT

1. I am a Special Agent of the Federal Bureau of Investigation (FBI) and have been

so employed since November 2006. Prior to joining the FBI, I served as a police officer for

approximately three years in the state of Washington. I am currently assigned to the FBI Houston

Field Office Counterintelligence Branch, where I investigate a variety of crimes related to

counterintelligence, including theft of trade secrets. I have held this assignment for over ten years.

In preparation for this assignment, and as part of my continuing education, I have successfully

completed national security-focused training, to include formal courses and training exercises. I

also have read and/or studied numerous publications related to historical and current

counterintelligence topics authored by analysts and investigators. I have participated in all aspects

of counterintelligence investigations, including, but not limited to, conducting the following:

physical surveillance; telephone, e-mail, and financial analysis obtained as a result of subpoenas;

subject interviews; witness interviews; electronic surveillance; and operations of confidential

human sources and undercover employees. Among other duties, I am involved in the investigation

of the defendants: Shan SHI (SHI); Kui BO (BO); Gang LIU (LIU); Samuel OGOE

(OGOE); Uka UCHE (UCHE); Johnny Wayne RANDALL (RANDALL); and Hui
HUANG (HUANG), as well as TAIZHOU CBM FUTURE NEW MATERIAL SCIENCE AND

TECHNOLOGY CO. LTD. (CBMF); AND CBM INTERNATIONAL, INC. (CBMI). I am

an investigative law enforcement officer of the United States, within the meaning of Title 18,

United States Code, Section 2510(7), and I am empowered by law to conduct investigations of,

and to make arrests for, offenses enumerated in Title 18, United States Code, Section 2516.

2. This affidavit is intended to show only that there is probable cause for the requested

warrants, and does not set forth all of my knowledge about this matter.

3. Based on the investigation described below, your affiant submits that there is

probable cause to believe that the defendants knowingly and willfully conspired to commit a

violation of 18 U.S.C. 1832 (Theft of Trade Secrets). As explained more fully below, from

March 2012 through May 2017, in the District of Columbia and elsewhere, the defendants

conspired to steal, possess, transmit, and receive trade secrets from a global engineering

company (Company A) in order to convert those trade secrets to their own economic benefit.

TERMS AND DEFINITIONS

4. Syntactic foam - is a composite material consisting of tiny hollow microspheres

suspended in an epoxy resin. The combination of hollow spheres encased in epoxy creates a strong,

light material ideal for a variety of applications. Strength and other performance characteristics

can be improved by chemical surface treatment of the microspheres. Syntactic foam may be

tailored for both commercial (oil exploration, etc.) and military use (including aerospace,

underwater vehicles, and stealth technology).

5. Trade Secret is a form and/or type of financial, business, scientific, technical,

economic, or engineering information, including patterns, plans, compilations, program devices,

formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes,

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whether tangible or intangible, and whether or how stored, compiled, memorialized physically,

electronically, graphically, photographically, or in writing if (a) the owner thereof has taken

reasonable measures to keep such information secret; and (b) the information derives independent

economic value, actual or potential, from not being generally known to, and not being readily

ascertainable through proper means by, another person who can obtain economic value from the

disclosure or use of the information. See 18 U.S.C. 1839(3).

INDIVIDUALS AND ASSOCIATED ENTITIES

6. Unless otherwise specified, the following facts come from open source materials,

law enforcement databases, grand jury subpoenas, court-authorized intercepts of the phone calls

and emails of the defendants, and/or information obtained from Company A, whose trade secrets

were stolen:

7. is a Chinese national who lives in China. is the President of

Taizhou CBM Future New Material Science and Technology Co. Ltd. (CBMF) and has traveled

to the United States on several occasions.

8. CBMF is a company that manufactures syntactic foam (and other related materials)

and is located in Zhejiang Province, China. , with others, established CBMF in May 2012 to

facilitate Chinas national goal of developing its marine engineering industry, specifically to

facilitate and increase innovative research and domestic manufacturing of syntactic foam. In

January 2014, Chinas Ministry of Industry and Information Technology (MIIT) 1 approved

CBMFs research and development (R&D) of high-performance, deep-water syntactic foam as

a major project of marine engineering. To accomplish this goal, CBMF joined a National Team

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MIIT plays a significant role in regulating major industries and approving new industrial
investments and projects in key areas such as information technology, telecommunications and
national defense in China.

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of Marine Engineering and a collaborative innovation center with Chinese State-Owned

Enterprise (SOE) 1, Chinese SOE 2, and Chinese SOE 3, to carry out joint ventures in deep-sea

buoyancy material, military insulation spacer material, and new lightweight composite design.

Internal CBMF documents showed CBMF intended to sell syntactic foam to both military and

civilian Chinese SOEs. The project resulted in CBMF receiving 4M Yuan (approximately

$650,000 USD) in Chinese-state funding.

9. Chinese SOE 1 is located in China and has extensive ties to the Chinese Peoples

Liberation Army (PLA) and the PLA Navy. Chinese SOE 1 is a partner in CBMFs collaborative

innovation center that receives Chinese-state funding.

10. Chinese SOE 2 develops, produces, and repairs military and commercial vessels,

and related products. Chinese SOE 2 is part of CBMFs collaborative innovation center that

receives Chinese-state funding.

11. Chinese SOE 3 is responsible for offshore oil and gas exploration and exploitation

in China. Chinese SOE 3 is part of CBMFs collaborative innovation center that receives Chinese

-state funding.

12. CBM International, Inc. (CBMI) was established in March 2014 and was

identified as a director, and CBMF is the only shareholder for CBMI. CBMI has received over

$2.2 million USD through June 2016 in wire transfers from CBMF to fund its operations. The

CBMI initial business plan stated that CBMI intended to concentrate on R&D of new buoyancy

material. The plan also recognized that the buoyancy material market was a $2 billion USD

industry, dominated by four companies, and that CBMI intended to be the fifth.

13. Shan SHI is the President of CBMI and a shareholder of CBMF. SHI is a

naturalized U.S. citizen who resides in Houston, Texas (TX). SHI has previously worked at

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Chinese shipbuilding entities where he was involved with the design of at least one PLA Navy

ship. In a resume current as of March 2016, SHI indicated that he was currently employed as an

overseas professor at Chinese SOE 1 and as a Senior Technical Advisor at Chinese SOE 2.

14. Kui BO is a Canadian citizen with a U.S. visa who has recently applied for U.S.

Legal Permanent Resident status. BO resides in the Houston, TX area. BO is a current employee

of CBMI. At CBMI, Bo is involved in day-to-day operations.

15. Samuel OGOE was born in Ghana and is now a naturalized U.S. citizen. OGOE

was employed at CBMI until late 2015, when he became a contract employee. Previously, OGOE

was employed by Company A as a Materials Development Manager where he had access to

proprietary and trade secret data beginning in or about 2008.

16. Johnny Wayne RANDALL is a U.S. citizen who was employed as a Production

Supervisor by Company A in Houston where he had access to proprietary and trade secret data

beginning in or about 2007.

17. Uka UCHE was born in Nigeria and is a naturalized U.S. citizen. UCHE was

employed by Company A in Houston where he worked as an Operations Systems Specialist, and

had access to proprietary and trade secret data beginning in or about 2008.

18. Gang LIU is a Chinese citizen present in the United States on a student visa since

2008. As of February, LIU was a permanent resident alien. LIU previously worked for Company

A as a Material Development Engineer and had access to proprietary and trade secret data

beginning in or about 2013. LIU is highly involved in the R&D at CBMI.

19. Hui HUANG is a Chinese national who lives in China. HUANG is an employee of

CBMF and is involved in many of the interactions and taskings to CBMI employees. HUANG

has traveled to the United States on numerous occasions during his employment with CBMF.

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20. Offshore Dynamics Inc. (ODI) is a Houston offshore engineering and consulting

company owned by SHI. Some ODI employees work on CBMI products, but use an ODI-affiliated

email domain, deepoil.com.

OTHER INDIVIDUALS AND ENTITIES

21. Company A a multi-national company with a subsidiary in Houston that is one of

four major producers of syntactic foam.

22. Company B a U.S. company that is one of four major producers of syntactic foam.

23. Company C a U.S. company where BO was formerly employed.

24. Company D a U.S. company in which SHI formerly had an ownership stake, but

as of October 2014, served only as a consultant.

25. Company E a U.S. company developing a new remote operated vehicle (ROV).

26. Company F a U.S. company consulting for U.S. Company E to vet suppliers for

the project.

SUMMARY OF THE INVESTIGATION

27. In October 2015, Chinas State Consultation Committee for the Building of a

Powerful Manufacturing Nation, a Chinese governmental agency, published a Key Fields

and Technologies Roadmap for Made in China 2025, which outlined development trajectories

for ten leading strategic Chinese industries. Marine Engineering Equipment was named the

fourth priority of the Chinese and included development of underwater production, system

design, manufacturing, testing and installation at 3,000 meters below sea level. The Roadmap

was a key part of the Chinese governments 13th Five-Year Plan and its stated desire to become

a marine power.

28. CBMF was established to address Chinas national goal to develop its marine

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engineering industry, specifically regarding R&D and domestic manufacturing of syntactic

foam for civilian and military applications.

29. On or about March 13, 2014, as part of an agreement to become a CBMF

shareholder, SHI was tasked by contract to increase CBMFs design capability of marine

equipment and buoyancy material by utilizing SHIs resources and access to expertise both at

home (in China) and abroad. SHI, in turn, would become a shareholder of CBMF, and the other

parties agreed to transfer their 200 million shares to [SHI] in the form of Renmibi two million

Yuan. SHI agreed that he would push forward the technology of CBMF. He also agreed to, as

necessary, establish subsidiaries or offices in the U.S. and other nations.

30. In the shareholder agreement, SHI also acknowledged and agreed that certain

information, including technology and customer lists developed for CBMF, had intrinsic value and

should be treated as CBMFs business secret. SHI and agreed that without CBMFs consent,

SHI could not use the technology in question and relevant information to establish and open

business in cooperation with others. Based on my training and experience, SHIs

acknowledgement of these conditions establishes SHIs appreciation of the value and sensitivity

of the type of proprietary information he would later steal from Company A.

31. As part of the agreement, SHI also would seek to bring in experts in high and new

technology and to set up a design team for CBMF.

32. In or about March 2014, SHI incorporated CBMI in Houston, Texas. SHI and BO,

who began working at CBMI in or about April 2014, then began to systematically target U.S.

employees who had experience in the production of syntactic foam. The co-conspirators initially

targeted a former employee (U.S. Person 1) of U.S. Company B and asked for that former

employees assistance in improving CBMFs capability to manufacture syntactic foam. U.S.

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Person 1 demanded $6 million USD in payment, and suggested a counter-offer of $3 million

USD in an email exchange with SHI. The two sides ultimately could not come to an agreement;

as shown below, SHI and BO then began to target U.S. employees of Company A.

33. In furtherance of the conspiracy to steal trade secrets from Company A, SHI and

BO prepared a profile of Company A employees for targeting, and obtained five resumes that fit

their requirements. Then, in 2015, CBMI successfully hired two former Company A employees,

OGOE and LIU, by offering them a combination of cash incentives and high salaries. As

described in detail below, UCHE, who was, at the time, a current employee of Company A,

provided at least two Company A trade secrets to OGOE. RANDALL, who was, at the time, a

current employee of Company A, provided at least one stolen trade secret to OGOE. OGOE, in

turn, provided these three Company A trade secrets, as well as additional information, to CBMI

shortly after being hired. LIU also provided several Company A trade secrets shortly after being

hired.

34. Some of the trade secrets were sent along by SHI and BO, and others, to HUANG

in China in order for CBMF to become a functional syntactic foam manufacturing facility. In

furtherance of that effort, HUANG tasked SHI and BO to obtain more syntactic foam

manufacturing data for CBMF. SHI, BO, and LIU also frequently traveled to China to assist

CBMF employees in operationalizing the factory. OGOE also traveled to China to assist CBMF

employees once in 2015. and HUANG provided the funding and facilitated payments from

CBMF to CBMI to maintain CBMIs operations and pay CBMI employee salaries, because

CBMI does not have significant income from any other source. All told, CBMF transferred over

$2.2 million USD to CBMI through June 2016.

35. In sum, between in or about 2015 and the present, as detailed below, the

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defendants engaged in a concerted campaign to steal the trade secrets of the manufacturing

process of syntactic foam from Company A. The theft of Company As trade secrets permitted

the Chinese-based CBMF to enjoy a dramatic advance in its syntactic foam manufacturing

capability without a commensurate expenditure of R&D funds.

PROBABLE CAUSE

Company A Records and Training for OGOE, UCHE, RANDALL, and LIU

36. OGOE began work with Company A on June 16, 2008, and worked at Company A

until January 28, 2012. UCHE began work with Company A on July 14, 2008, and worked at

Company A until approximately December 2015. RANDALL worked at Company A (or a

predecessor company) from March 23, 1998, until May 15, 2017. LIU worked at Company A

from February 25, 2014, to February 15, 2015.

37. OGOEs employment with Company A was terminated on January 28, 2012.

OGOE signed an agreement acknowledging he had been in contact with confidential and

proprietary information and/or trade secrets of Company A. By signing the agreement, OGOE

agreed he would not reveal to any person, firm, or corporation any trade secrets or confidential

information from Company A.

38. The Company A Employee Guide (Guide) dated July 2007 was signed by

RANDALL on August 9, 2007; by OGOE on June 16, 2008; and by UCHE on July 1, 2008. The

Guide stated that employees would be working with confidential proprietary information, which

was important to Company As competitive position in the industry. Employees were required

to respect all information, including confidential information, trade secrets, trademarks, trade

names, patents, designs and other information utilized by or beneficial to the Company in

connection with the Companys business. Employees were expected to report any efforts by

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anyone to obtain or solicit information to which he or she is not entitled.

39. According to Company As Technology User Code, dated January 2009 (Code),

disclosure or dissemination of confidential or proprietary information regarding Company A, its

products or its customers, to unauthorized parties was strictly prohibited. The Code outlined

requirements in order to protect the information, including establishing individual logins for

username and passwords, physical barriers such as locking file cabinets or safes, and limitations

on portable media. This User Code was signed by OGOE on September 30, 2009; by RANDALL

on October 10, 2009; by UCHE on November 25, 2009; and by LIU on both June 10, 2013, and

February 25, 2014.

40. On July 13, 2010, RANDALL, as a newly minted manager, signed a separate

employee acknowledgement stating the following behaviors were discussed and will not be

tolerated at Company A, including Theft of time, assets, property of company.

41. The Company A Employee Agreement for Management and Technical Personnel

signed by LIU on June 10, 2013 stated, I will at all times, both during the course of my

employment with [Company A] and after the termination of my employment, hold in the strictest

confidence, and will not disclose directly or indirectly to anyone...any confidential or proprietary

matter which has been obtained by me in any way during the period of my employment with

[Company A], including but not limited to ...trade secrets, processes, formulas, patents,

methods...compositions. Per LIUs Non-Competition, Non-Solicitation, Confidentiality,

Invention and Trade Secret Agreement, dated May 29, 2014, LIU agreed that during and after

the term of employment, he will maintain in confidence and not divulge to others or appropriate

or reproduce for his own use or benefit or for the use or benefit of others, any information LIU

may acquire or develop or has acquired or developed, during the term of the employment which

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relates to ideas, discoveries, inventions....trade secrets or other confidential or proprietary

information of [Company A]. LIU was laid off by Company A in February 2015 and as part of

his separation, LIU signed a General Release and Settlement Agreement. In the agreement, LIU

acknowledged that he had come into contact with confidential and proprietary information and/or

trade secrets of Company A. LIU agreed that he would not reveal to any person, firm or

corporation any trade secrets or confidential information of Company A.

U.S. Company C Training for BO

42. Company C provided training to BO including: Confidential Information

Protection General Audience, April 8, 2013; Confidential Information Protection General

Audience, September 13, 2011; Confidential Information Protection General Audience, July

19, 2010; Employee Trade Secret Information Acknowledgment, signed on July 12, 2010.

43. In December 2014, a hiring agency that introduced OGOE to CBMI sent BO the

general release and settlement agreement between OGOE and his prior employer, Company A,

which OGOE signed in January 2012. OGOE acknowledged and agreed he would not reveal any

trade secrets or confidential information from Company A without Company As consent.

The Targeting of an Employee of U.S. Company B

44. On or about April 30, 2014, BO emailed himself an attachment entitled

Competitors. The attachment contained the names of seven companiesincluding Company A

and Company B along with their booth locations at the 2014 Offshore Technology Conference

in Houston. The attachment also noted the products that each of the companies produced, such as

buoyancy products, floats, and offshore products.

45. A number of months later, on or about October 15, 2014, a former employee of

Company B, U.S. Person 1, emailed SHI and a document titled CBM-Plan. The email and

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associated attachment contained a detailed proposal by U.S. Person 1 to assist CBMF with

establishing a buoyancy manufacturing facility in China. The proposal outlined three phases, and

spanned a period of 9-16 months. The total proposed fee by U.S. Person 1 for U.S. Person 1s

consultation was $6 million USD.

46. The following day, on or about October 16, 2014, BO emailed SHI a responsive

PowerPoint presentation titled Negotiation plan. This presentation outlined a negotiation plan

for dealing with U.S. Person 1. Step one was to acquire U.S. Person 1s Curriculum Vitae (CV)

and mine it for useful information, including comparing it with other potential hiring candidates.

Step 2 was a detailed and itemized business proposal designed to determine whether U.S. Person

1s consultancy agreement would satisfy CBMIs goal. Step 3 emphasized that CBMI needed to

acquire testable samples. The presentation ultimately recommended rejection of U.S. Person 1s

proposal to consult on a Chinese facility in favor of building a CBMI workshop in Houston.

47. On or about October 21, 2014, emailed SHI in response to U.S. Person 1s $6

million USD proposal, suggesting cooperation with U.S. Person 1 in exchange for different

proposals amounting to up to $3 million USD. U.S. Person 1 was never hired.

Targeting Employees of Company A/Hiring Sam OGOE

48. During the same time period in which BO and SHI were weighing the proposal

from U.S. Person 1, on or about October 17, 2014, BO sent a job description via email to a different

identified U.S. Person, targeting Company A. In the email, BO specifically noted that CBMI was

looking for people who mainly worked or are working for [Company A] in Houston to help us

set up a small product line for drilling buoyancy module. On or about October 24, 2014, in

accordance with their targeting plan, BO emailed SHI the CVs of Company A employees that BO

had found online, including the CV of defendant OGOE.

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49. On or about October 24, 2014, BO confirmed through a hiring agency that OGOE

was indeed an expert on drilling riser buoyancy materials. The hiring agency responded to Bos

inquiry, stating that OGOEs experience was with drill riser buoyancy materials containing

syntactic foam at Company A in Houston.

50. On or about October 30, 2014, BO wrote a draft email to himself, addressed to the

same hiring agency, that read: Please let Sam [OGOE] know the following as what we are mostly

interested in:

1. Chemical process to produce the qualified buoyancy material in the lab;

2. Chemical process in scientific details on the product line (tumblers, vacuum tanks,

mixers, etc. /row material, coating-carbon or fiber on macro-sphere;

3. Future buoyancy material development;

51. On or about October 30, 2014, CBMI interviewed OGOE. On October 31, 2014,

OGOE sent an email to BO entitled Prospective CBM International Team Member. Of note,

OGOE revealed to BO that he (OGOE) had spoken to a friend, another identified U.S. Person, who

had worked with OGOE at Company A. OGOE said the U.S. Person was the expert Guru in

drill riser and polyurethane modules manufacturing who had worked with a U.K. company before

transitioning to Company A. Later the same day, BO forwarded the email to SHI. SHI responded

by saying, Good. The buoyancy world is opening to us now. Based upon my training and

experience, these communications indicate that the conspirators had discussed the full range of

sensitive technologies they were interested in acquiring from Company A.

52. On or about November 13, 2014, BO sent an email to the hiring agency stating that

CBMI had decided to hire OGOE, and, thus, there would be no need for another interview. On or

about November 14, 2014, OGOE sent an email to BO, thanking him for a payment of $2,000

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USD. On or about November 14, 2014, BO forwarded OGOEs email to SHI and stated, Looks

like Sam [OGOE] is not greedy so far. OGOEs comment is likely in reference to some type of

hiring bonus, while BOs response is likely a reference to the previously described demand for $6

million USD by U.S. Person 1. However, it is unclear from the evidence exactly how much

additional remuneration, more than the first payment, OGOE was promised at this time.

53. On or about November 25, 2014, BO emailed the hiring agency to confirm that

OGOE was able to work legally for CBMI after his prior employment with Company A. BO stated

that CBMI did not want Company A to get us in future [trouble] for IP issues. The hiring agency

responded that because OGOE had signed a non-compete agreement with Company A in 2012 that

spanned only two years, the agreement was no longer in effect. BO forwarded that email response

to SHI and stated, With this email, I think we are off the hook. BO also stated, I also asked

Sam better to find the original doc. Your affiant believes BO was recommending to SHI that

OGOE should check the severance agreement and/or provide it to CBMI. OGOE was hired at a

yearly salary of $100,000. Your affiant believes that OGOE was unemployed immediately prior

to CBMI.

54. On or about November 5, 2015, BO emailed SHI stating that Company A had laid

off employees and could be closing its Houston facilities. In the email, BO stated there were 16

people at one site and about 50 people at another site who had been laid off. BO also noted there

were 190 employees from R&D and technical maintenance that had left due to a project failure.

Based on my training and experience, I believe that this email is further evidence that the

conspirators were targeting individuals who may be in position to disclose the sensitive technology

developed by Company A.

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Theft of Sphere diameter Pressure and Density Spreadsheet Containing Trade Secrets

from Company A (Violations 1 and 4 in chart at Affidavit, page 27 (chart))

55. On January 13, 2015, RANDALL emailed OGOE the following information from

his personal email account: Sam Please see attach for helpful info. Also we have 3 size test

cylinders. Attached to the email were seven files. One of the attachments was an Excel

spreadsheet with two tabs titled Bead burst and density. Notably, Tab 1 included Company As

logo and name.

56. This emails metadata listed johnny.randall as the author, and the company as

Company A. 2 The document was created on June 19, 2012 at 0955AM.

57. On or about January 28, 2015, OGOE emailed SHI regarding diameter, density,

pressure, etc. for various types of coated spheres. The email had an attached spreadsheet titled

Sphere Diameter Pressure and Density 1-27-15.

58. Based on my investigation, this documents metadata showed it was authored by

Company A employee OGOE on June 19, 2012 at 0955AM and last modified by OGOE on

January 28, 2015. This document was identical to the one sent by RANDALL to OGOE, except

that the Company A logo and one chart had been removed.

59. In reviewing the above email/attachment, a Company A official stated the Sphere

Diameter Pressure and Density 1-27-15 Excel spreadsheet emailed by OGOE to SHI, was a

Company A trade secret and was considered critical information for Company A.

60. The official explained that this document was created by Company As technical

innovation team working on different formulations of resin for different spheres. The tables in

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Metadata in this context refers to data about a particular document, such as data relating to its
origins.

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this spreadsheet described the performance of each formula at different depths and densities. The

document contained the performance of various spheres, including the results of an experimental

formula developed by Company A. Company A began experimenting with the new formula in

2013 or 2014. The Company A official explained the new formula was used by Company A to

increase strength while lowering the cost of producing the spheres. The official stated that access

to this spreadsheet would have been limited to the six team members of the technical innovation

team who had access to the teams digital directory in Company As database. The official also

stated that access to Company As computers required a complex alphanumeric password which

had to contain a symbol and had to be regularly changed. Access to the technical innovation teams

folder was restricted to the six or so members of the team and even the President of the company

did not have access to this folder. OGOE was a chemical engineer and was on the technical

innovation team during his time at Company A and therefore could have had access to the

spreadsheet at the time it was created.

61. The Company A official also explained that unlike certain sensitive documents,

such as the Hydrostatic crush test PowerPoint described below, the technical innovation team

documents often did not display prominent trade secret warnings or markings. The official

stated that Company A expected certain documents, such as the crush test PowerPoint, to be

distributed to others on the laboratory floor as a guide for employees to follow. Accordingly,

those employees needed to be specifically warned about trade secrets, and therefore the

documents required the markings. However, the spreadsheets described above were never

allowed to be printed or shared digitally outside of the very limited number of employees on the

technical innovation team. Those individuals were indoctrinated that everything to which they

had access at Company Awas presumptively a trade secret. Therefore, the documents did not

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contain redundant trade secret warnings. The Company A official also explained that during the

2013 2015 time period, the technical innovation team consisted of six employees out of

approximately 400 total employees at Company As Houston location.

Theft of Density Calculations from Company A (Violations 2 and 3 in chart)

62. On or about January 14, 2015, UCHE emailed OGOE an excel spreadsheet titled

MIDIS DENSITY 2015. UCHE forwarded the spreadsheet from his Company A email account

to his personal email account prior to sending it to OGOE.

63. Based on my investigation, the documents metadata showed it was authored by an

identified Company A employee on May 13, 2013, and last modified by UCHE on January 14,

2015.

64. A Company A official stated the MIDIS DENSITY 2015 Excel spreadsheet,

emailed by UCHE to OGOE, was clearly a Company A trade secret and even had the Company

As shop order number and the code of the Company A employee that ordered the testing. The

official explained that each line of the spreadsheet listed the density, based on size and weight, of

different 10mm macrospheres. The spreadsheet in question described the performance of specific

spheres pulled from a specific batch. Spheres are tested for diameter and weight, with the results

being averaged to represent the entire batch. The official stated this document was a trade secret

because it would give a competitor key information about the performance of a certain batch of

Company As macrospheres. This document would therefore give CBMI and CBMF benchmarks

to meet in the production of their own macrospheres. The official stated UCHEs job consisted of

putting together documentation for quality control orders, so UCHE would have had read-only

access to this document, but would not have been able to modify it. The Company A official

considered the trade secret costly to develop. The official further commented there were not a lot

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of startups in the buoyancy industry because the technology was so lengthy a process to develop.

Theft of Standard Operating Procedures for Hydrostatic Pressure Testing from Company

A (Violation 5 in chart)

65. Hydrostatic testing is an important component in determining the quality of

manufactured spheres used in syntactic foam. On or about January 30, 2015, Company A

employee UCHE sent an email from his personal email account to OGOE with the subject Test

procedure. Attached to the email was a PowerPoint titled SOP00339-7 Hydrostatic Crush

Pressure HCP Mini-Sphere.pptx, which contained a legal warning on each slide. The legal

warning stated, This document contains confidential information. All rights (including copyright,

confidential information trade secrets and design rights) are owned by [Company A]. No use or

disclosure is to be made without prior written permission of [Company A]. All rights reserved.

66. Based on my investigation, the PowerPoints metadata showed it was authored by

two Company A employees on February 23, 2011 and was last modified on January 16, 2015.

67. A Company A official stated the Standard Operating Crush Test Procedure Power

Point for 10mm Spheres, emailed by UCHE to OGOE, was a Company A trade secret and in fact

carried a warning on each page that identified Company A and stated This document contains

confidential information. All rights (including copyright, confidential information trade secrets

and design rights) are owned by [Company A]. No use or disclosure is to be made without prior

written permission of [Company A]. All rights reserved. The Company A official stated

employees conducting tests would have a printed copy for use on the shop floor. The printed copy

would reside with other policies in a binder while the electronic version of the document resided

on the companys Quality Control Drive which had limited access. Company A considered this

trade secret costly to develop.

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68. On or about March 20, 2015, OGOE emailed SHI, BO, and another CBMI

employee and stated that the 10mm carbon coated sphere densities for the hydrostatic burst

pressure test in China were attached. OGOE also noted the pressure test procedure was attached

for their review prior to sending them to China. The email had two attachments, including a Word

document titled Hydrostatic Burst Pressure Test Procedure, and a spreadsheet titled Sam-10

mm Carbon Density 3-20-15. The document contained a summarized version of the contents of

the Company A PowerPoint UCHE had sent to OGOE on January 30, 2015.

69. On or about March 21, 2015, BO forwarded OGOEs above email to HUANG at

CBMF in China. On or about March 26, 2015, HUANG emailed BO and stated, Attached is the

pressure testing report for 10mm carbon coated spheres. BO then forwarded HUANGs email to

OGOE.

70. On or about March 23, 2015, SHI sent an email titled Hydrostatic Burst Pressure

Test Procedure to HUANG at CBMF in China and copied BO and U.S. Person 3. The email

attached two documents titled Hydrostatic Burst Pressure Test Procedure 10mm OD and

Hydrostatic Burst Pressure Test Procedure 4mm OD.

71. Based on my investigation, the documents SHI sent were substantially similar to

what OGOE had sent, with a notable exception regarding the unit of measure, which was changed

from Psi (pressure per square inch) to Mpa (megapascals). One megapascal is approximately 145

Psi. Megapascals are based on the metric system and are the unit of measure utilized in China,

while Psi is predominantly used in the United States. Based on this, your affiant believes SHI was

in effect translating Company As trade secrets for use in China.

72. On or about April 21, 2015, HUANG sent an email to SHI and BO with the results

of testing 100 microspheres. Huang said only 20 of the microspheres passed the test and asked to

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know the pressure requirements that should be applied in the test.

73. On or about July 5, 2015, U.S. Person 3 sent an email to SHI and copied HUANG

and LIU. The email was titled Re: Deep water drilling riser buoyancy module product research

and development program. The email attached a document laying out CBMFs strategy regarding

drill riser buoyancy module (DRBM) R&D and noted the companys goal to support the

development of marine equipment for Chinas next Five-Year Plan. The document listed five

objectives regarding R&D and production of buoyancy materials, including a state-of-the-art

deep-water hydrostatic pressure test system. The document stated that the system was

indispensable but the Chinese versions were obsolete and not conducive for the development of

Chinese marine engineering equipment. The document stated that CBMF has planned to design a

set of a large deepwater hydrostatic pressure test system that matched the international advanced

technology level within one year.

74. Your affiant believes the above exchange indicates Company As hydrostatic

pressure testing trade secrets were incorporated by CBMF to test the spheres being manufactured

in China, and that CBMF considered hydrostatic pressure testing indispensable to its mission.

Hiring Gang LIU to ODI

75. On or about April 10, 2015, SHI sent an email to his deepoil.com account. The

subject of the email was Confirm: Interview with Shan SHI at [U.S. Company D], 04/09 (Thur)

10:30 am. The email contained a forward of a message from LIU to SHIs U.S. Company D

email account. In the original message, LIU introduced himself and explained a friend referred

him to U.S. Company D and SHI. LIU asked to confirm the date/time of his interview at U.S.

Company D. The email contained LIUs resume, which outlined LIUs employment at Company

A.

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76. On or about April 12, 2015, SHI, from his deepoil.com account, emailed LIU to

offer a full time job at ODI. LIU accepted the offer on the same day, and started working at ODI

on April 13, 2015. Your affiant believes that his starting salary was the same as at Company A.

77. On or about June 20, 2016, another identified U.S. Person emailed CBMIs

accountant and instructed the accountant to stop Gang LIUs ODI payroll from June 1 [2016]

because he was transferred to CBMIs system.

78. On or about August 21, 2015, HUANG emailed SHI and U.S. Person 3 questions

regarding a sphere [syntactic foam component] patent application [in China]. HUANG suggested

three options regarding the inventor. HUANG stated that although the technical portion of the

sphere originated from LIU, the patent office thought LIU was not an appropriate choice because

he was still in the non-compete clause period with Company A; therefore, it was against the law.

HUANG stated someone needed to explain this to LIU. The second choice would be SHI or U.S.

Person 3, and since they had no official contract with Company A, the risk was manageable. The

third choice would be HUANG as a representative of Chinese staff.

79. Based on my investigation, and as reflected by the conversation between SHI and

HUANG about a patent, SHI likely placed LIU at ODI for one year in order to avoid any unwanted

attention to LIUs work for CBMI prior to February 2016, including avoiding the issue of Lius

non-compete provision with Company A.

Theft of Manufacturing Process Data Models from Company A (Violations 6 and 8 in chart)

80. On or about April 15, 2015, during his first week at work at ODI, LIU emailed SHI

a macrosphere process model spreadsheet. Within the spreadsheet was a tab labeled Reference-

[Company A].

81. Based on my investigation, the documents metadata showed it was created on

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September 15, 2006 and last modified on April 15, 2015. Your affiant believes that despite LIUs

putative employment by ODI at this time, LIU was actually working on CBMI projects in violation

of his Non-Compete Agreement with Company A, and was using proprietary and trade secret

information taken from the Company A.

82. A Company A official stated the Reference-[Company A] Excel spreadsheet, was

a Company A trade secret since it contained proprietary information regarding the number of coats

on spheres and the performance of these spheres at certain densities.

83. On or about April 14, 2015, HUANG tasked SHI and BO via email regarding the

manufacture of syntactic foam. The email, in part, stated, I need information regarding formula,

preparation process and performance of the syntactic materials.

84. On or about May 8, 2015, LIU emailed SHI, BO, and HUANG a spreadsheet titled

Macrosphere Rating & Cost. Within the spreadsheet was a tab labeled Reference-[Company

A].

85. According to my investigation, the documents metadata showed that it was created

on September 15, 2006 and last modified on May 8, 2015.

86. A Company A official stated the Macrosphere Rating and Cost -Tab Labeled

[Company A] Excel Spreadsheet emailed by LIU to several CBM employees, was a Company A

trade secret and was another limited access document from the technical innovation team. The

official stated when the official took over Company As Houston facility in 2015, the technical

innovation team consisted of approximately six people. The team members consisted of process

and design engineers and material scientists. LIU was a design engineer on the technical

innovation team and would have had access to this spreadsheet. The official confirmed that this

document would have been on the protected technical innovation team drive, and the information

22
it contained was clearly dynamite in terms of its significance as a trade secret to Company A.

The document contained the costs for a newly developed formula straight from Company As

technical database and was something the official would not want competitors to have. The

official stated LIUs employment was terminated and LIU was paid by Company A until April 3,

2015 as part of his severance package.

Theft of Theoretically Calculated Syntactic Foam Formulation (Violation 7 in chart)

87. On or about April 17, 2015, LIU emailed SHI a file containing a theoretically

calculated syntactic foam formulation.

88. A Company A official explained that the formulation was proprietary information

and a Company A trade secret, which had been accessible only to the Company A technical

innovation team.

Theft of Raw Materials Prices (Violation 9 in chart)

89. On or about June 4, 2015, LIU emailed HUANG a listing of Company As raw

materials pricing, stating, The attachment provides technical data of the raw materials and prices

of part of the raw material received by [Company A] for your reference. Attached to the email

were datasheets and one spreadsheet with a tab labeled Reference-[Company A]. A Company A

official reviewed the Reference-[Company A] spreadsheet and stated that it was a trade secret

because it contained the prices Company A paid for various raw materials at certain volumes in

2014, and that this information was unique and important to Company A. Per Company A, this

was another limited access document from the technical innovation team, to which LIU had access.

Based on my training and experience, your affiant believes Company A protected this price data

in order to remain competitive in bidding for contracts.

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Company A Security Measures

90. Company As Houston facility is fully-fenced and has a security guard on duty at

all times. Company A employees must show a badge to the security guard to access the facility.

The Company A facility is monitored by security cameras. There are no restricted areas of access,

but only designated employees have access outside of business hours.

91. Each network user of Company A had a local user profile and had to login with a

username and password. The password was complex, alphanumeric, required a symbol, and had

to be regularly changed. Each user would have a different level of access to the network depending

on what they were assigned to work on. As previously described, sensitive information was placed

in limited access directories.

92. The Company A computers that contained the technical innovation team documents

previously described as trade secrets were connected to the network only by approved group

members with requisite privileges; approval which could only be granted by an IT administrator,

and required a logon and password.

93. All visitors to any Company A facility housing trade secrets required an escort. The

visitors were also required to sign a confidentiality agreement. No photography or recordings were

allowed in these facilities. New hires received and signed non-compete agreements and training

regarding trade secrets. Employees executed non-compete agreements 21 days prior to separation.

Each agreement includes an offer to answer employee questions. As noted elsewhere herein,

OGOE, LIU, and UCHE each received notification of and/or agreed not to divulge certain

protected information, included Company A trade secrets.

Establishing CBMF Factory in China

94. On or about October 1, 2015, OGOE sent an email to BO titled Greetings from

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CBM Future Factory. OGOE asked how his colleagues in the United States were doing and stated,

We are at the factory gladly working to get the task accomplished. According to travel records,

OGOE traveled to China on September 16, 2015 and returned on October 7, 2015.

95. On or about November 19, 2015, SHI emailed a Company A employee saying he

was back in China again working at the CBMF office.

96. Based on my training and experience, as well as other information developed during

the course of this investigation, your affiant believes that CBMF then attempted to sell to Company

A the same trade secret technology that CBMF had stolen from it. I interviewed a Company A

official in October 2016 who stated that CBMF employees SHI and HUANG had offered to

produce spheres for Company A in China at a significantly lower price than what it cost Company

A to make them. CBMF even offered to sign an exclusivity agreement with Company A,

promising if Company A bought a large enough quantity of macrospheres, CBMF would not sell

its spheres to any of Company As competitors. The Company A official visited CBMF in

November 2015. The Company A official stated that although at the time of the meeting, CBMFs

factory had issues and was not set up properly, CBMFs spheres were improving in quality, and

Company A had to seriously consider CBMFs offer. The main rationale for considering the deal

was to block Company As competitors from gaining access to cheaper macrospheres. The

Company A official also noted he had been surprised by how quickly CBMF had been able to

develop quality products.

97. That Company A official also said SHI stated that SHI was in contact with a former

Company A employee, who is an expert in the buoyancy field (U.S. Person 2). On October 20,

2016, BO emailed U.S. Person 2 saying, Our company is new and mainly involved with the

buoyancy products for offshore applications. BO continued, Right now we are in the stage of

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developing our light density syntactic foam products and we would like to speed up for the

developing period.

98. On or about October 17, 2016, SHI called an identified U.S. Person about CBMF.

SHI explained he had a factory in China that produces buoyancy material. SHI stated the business

was doing very well, and the competitors had died off. SHI stated they were becoming a bigger

company and said, We standout and everybody come to see us now to try to get cheap product.

[sic] SHI also stated he hired a whole bunch of people in the United States that really know how

[to develop buoyancy material].

99. During a dinner conversation on December 8, 2016, SHI said, In all aspects, China

has no own innovations; thats why theirs are much cheaper. They save lots on research money

because it will be so costly in the beginning. The first model will cost so much. Just to take a look

at it, China will understand it immediately and will not do research by themselves. The U.S., for

example, is like a locomotive, driving its own train, selling tickets and showing others around.

China will either pay to ride in that train or drive its own train.

100. On or about October 24, 2016, emailed SHI asking him to strengthen ties with

Company A. told SHI (1) to find out whether CBMF could sell the Company A foam balls

and the micro spheres, and (2) they need to know Company As moves in order to adjust CBMFs

business strategy.

101. On or about April 18, 2017, SHI called U.S. Person 3. SHI explained that HUANG

had told him that argued with the bank and others regarding the availability of funds.

Afterward, the balance was immediately increased to four million (unspecified currency). SHI told

U.S. Person 3 that 40,000 (unspecified currency) had been mailed. U.S. Person 3 responded they

had seen it.

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account at the Bank of China to CBMIs U.S.-based account at Bank of America, ending in 6528.

The vast majority of CBMIs operational budget came from these wire transfers from CBMF.

Company E Bid the Undercover Operation

104. During a series of communications in or about April 2017, BO and SHI were

advised of an opportunity to bid on a contract for the next generation of commercial Remote

Operated Vehicles (ROV). The ROVs had to attain depths of 4,000-6,000 meters and utilize low

density syntactic foam technology. BO and SHI were instructed to communicate with U.S.

Company F, which served as a consultant on this project for U.S. Company E. Both U.S.

Companies E and F acted at the instruction of law enforcement for these communications. BO,

SHI, and LIU submitted their bid and LIU provided a list of projects that CBMI had previously

completed, including Autonomous Underwater Vehicle research for SOE 1, and unspecified

syntactic foam projects for SOEs 2 and 3. On May 17, 2017, U.S. Company F informed CBMI

that they were selected as a finalist and they were invited to present their bid at the Regus

conference building located at 1050 Connecticut Avenue, N.W., Washington, D.C.

105. On May 17, 2017, SHI hired U.S. Person 4, a former employee of Company B, to

work for CBMI as its Chief Technical Officer, with a starting salary of $200,000 USD.

106. On May 19, 2017, SHI advised Company F that SHI, LIU and U.S. Person 4

would attend the briefing arranged by Company F.

107. On May 23, 2017, in the District of Columbia, SHI, LIU and U.S. Person 4

provided a presentation of CBMI and CBMFs capabilities to U.S. Company F, as part of their

bid for the U.S. Company E project, and in furtherance of the conspiracy to convert Company

As trade secrets to their economic benefit. During the course of that presentation, SHI boasted

about the quality of CBMIs spheres, claiming that CBMI redesigned spheres to make them

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two levels better.

108. Also during the May 23, 2017 meeting, LIU contended that CBMIs spheres are

customizable beyond 4,000 meters. SHI agreed, adding that such spheres cannot be exported

to China. SHI and LIU were then placed under arrest by the FBI for violating 18 U.S.C.

1832(a)(5).

CONCLUSION

109. On the dates set forth herein, in the District of Columbia and elsewhere, including

outside the jurisdiction of any particular State or district, the defendants listed herein, together

with others, conspired to steal and convert a trade secret, that was related to a product and

service used in and intended for use in interstate and foreign commerce, to the economic benefit

of anyone other than the owner of that trade secret.

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110. Accordingly, I submit that there is probable cause to establish that the defendants

SHI, BO, LIU, HUANG, OGOE, RANDALL, and UCHE violated 18 U.S.C. 1832(a)(5). I

declare under penalty of perjury that the foregoing is true and correct to the best of my

knowledge and belief.

Roman Rozhavsky Sworn Telephonically


Special Agent
Federal Bureau of Investigation

Subscribed and sworn before me telephonically by Special Agent Roman Rozhavsky per Fed. R.
Crim. P. 41(d)(3) on this _______ day of May, 2017.

______________________________
Honorable G. Michael Harvey
United States Magistrate Judge

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