November 12, 2019 / 10:35 PM / a month ago

UPDATE 1-Chinese national pleads guilty in U.S. court to stealing Phillips 66 trade secrets

(Adds background, details)

By David Shepardson and Eric Beech

WASHINGTON, Nov 12 (Reuters) - A Chinese national pleaded guilty on Tuesday to stealing trade secrets from U.S. petroleum company Phillips 66, where he worked on the research and development of next generation battery technologies, the U.S. Justice Department said.

Hongjin Tan, 36, stole information regarding the manufacture of a “research and development downstream energy market product” that is worth more than $1 billion, the department said in a statement. The department identified the company where he worked as Phillips 66 in court documents filed in Oklahoma.

Tan was a staff scientist at Phillips 66 in Bartlesville, Oklahoma, from May 2017 through December 2018. The company said in December it was cooperating with the Federal Bureau of Investigation in a probe involving a “former employee at our Bartlesville location,” but declined to comment further on Tuesday.

An FBI affidavit said Phillips 66 called the agency in December 2018 to report the theft of trade secrets, around the same time that Tan told a former co-worker he was going back to China. Tan was arrested before he could return.

“Tan’s guilty plea continues to fill in the picture of China’s theft of American intellectual property,” said Assistant Attorney General for National Security John Demers.

“The Department launched its China Initiative to battle precisely the type of behavior reflected in today’s plea — illegal behavior that costs Americans their jobs — and we will continue to do so.”

In his plea agreement, Tan admitted to intentionally copying and downloading research and development materials without authorization from his employer.

Tan will be sentenced on Feb. 12 and the Justice Department said it agreed a sentence of up to two years in prison would be appropriate as would $150,000 in restitution to Phillips 66.

Tan was responsible for research and development of the U.S. company’s battery program and developing battery technologies using its proprietary processes. Phillips 66 told the FBI in 2018 it had earned an estimated $1.4 billion to $1.8 billion from the unspecified technology.

The FBI found an employment agreement from a Chinese company that has developed production lines for lithium ion battery materials on Tan’s laptop. (Reporting by Eric Beech and David Shepardson; Editing by Mohammad Zargham and Sonya Hepinstall)

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