Houston man indicted for 'vast criminal conspiracy' to aid China-owned companies

A Houston businessman was indicted Friday on conspiracy to commit economic espionage, stealing trade secrets and federal money conspiracy charges, according to the U.S. Department of Justice.



Shan Shi, 53, of Houston, is being accused of working against a U.S. business on behalf of a company in China engaged in manufacturing buoyancy material for military and civilian uses. Gang Liu, 32, a Chinese nationalist, was also indicted on economic espionage and trade secret charges, according to the Justice Department press release.



"This superseding indictment alleges a vast criminal conspiracy involving everything from trade secret theft to money laundering and other financial crimes," Internal Revenue Services Criminal Investigation Chief Don Fort said in a statement.

Two other Houston-area individuals, a Dallas-area man and one other were previously indicted on related charges. Uka Kalu Uche, 36, from Spring, Samuel Abotar Ogoe, 75, from Missouri City, and Kui Bo, 41, a Canadian citizen who had been residing in Dallas, all pleaded not guilty last year. Hui Huang, 33, a Chinese national, was also indicted but is believed to be at large in China. A seventh person previously pleaded guilty in December 2017 to a charge of conspiracy to commit theft of trade secrets, according to the news release.

READ MORE: Feds accuse 6 Houston-area men of stealing trade secrets for China

All six individuals were indicted in June 2017 on a charge of conspiracy to commit theft of trade secrets. This superseding indictment adds the economic espionage count against Shi and Liu, as well as the federal money laundering conspiracy count against Shi. CBM-Future New Material Science and Technology Co. Ltd., a Taizhou, China-based company and its Houston-based subsidiary, CBM International, Inc., have also been indicted on the same charges as Shi, according to the press release.

The indictment alleges that from at least 2013 through May 2017, Shi operated on behalf of CBMF, which intended to create a facility in China to sell syntactic foam. CBMF research was funded by the Chinese state and the company collaborated on innovation efforts with Chinese government entities. Shi and Liu and the other four indicted in the case conspired to steal trade secrets from a global engineering firm that produces syntactic foam, according to the news release.



In March 2014, Shi incorporated CBMI, which was owned and funded by CBMF, in Houston. CBMF employees wired approximately $3.1 million to CBMI between June 2014 and May 2017. Shi and others recruited and hired current and former employees of the engineering firm in Houston, including Liu, to aid CBMF's capability to make syntactic foam.

Liu previously worked for the engineering firm as an engineer and had access to proprietary and trade secret data. He and others are accused of passing along those trade secrets to benefit the Chinese government and other Chinese state-owned enterprises, according to the press release.

The maximum statutory penalty for conspiracy to commit economic espionage is 15 years incarceration. The maximum for conspiracy to commit theft of trade secrets is 10 years. The maximum for conspiracy to commit money laundering is 20 years, the press release states.