Theft Ring Targeted Texas Deepwater Oil-Drilling Tech

(Bloomberg) -- A man was convicted in federal court of conspiracy to steal deepwater trade secrets, highlighting the fierce competition between the world's economic superpowers for oil-drilling supremacy.

Shan Shi, 54, faces sentencing for conspiracy to commit theft of trade secrets on Oct. 25, the U.S. Justice Department said in a statement on Tuesday. Shi led a ring of at least four other people that targeted syntactic foam, a key material for deepwater oil drillers that also has military and commercial uses, according to the statement.

Shi targeted Trelleborg AB's Houston subsidiary and sought information for his own company for the benefit of a Taizhou, China-based company called CBM-Future New Material Science and Technology Co. Ltd., according to the statement. CBM sent Shi $3.1 million from 2014 to 2017. FBI counterintelligence agents spent years identifying and dismantling Shi's “prolific network,” the Justice Department said.

Laura Zell, an attorney with Arent Fox LLP on Shi's defense team, didn't respond to a telephone message seeking comment.

Shi “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,” Assistant Attorney General for National Security John C. Demers said in the statement. “Like our many other prosecutions implicating China's economic aggression, this case exemplifies both the threat to American companies and our commitment to confront it.”

--With assistance from Peter Jeffrey.

To contact the reporter on this story: Joe Carroll in Houston at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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