AO 91 Rev 11 1 I Criminal Complaint UNITED STATES DISTRICT COURT for the Northern District of Oklahoma United States of America V Hongjin Tan Case No Defendant s CRIMINAL COMPLAINT I the complainant in this case state that the following is true to the best of my knowledge and belief On or about the date s of Northern 12 12 2018 in the county of United States of America Oklahoma District of - - - - - - - the defendant s violated Offense Description Code Section Title 18 U S C 1832 a 2 - Theft of Trade Secrets This criminal complaint is based on these facts See attached affidavit in support rif Continued on the attached sheet Printed iwme and title Sworn to before me and signed in my presence Date 2 - Zo- 7_ 3 35pJYt City and state -- rs' ' DK US Magistrate Judge Jodi F Jayne Printed name and title in the AFFIDAVIT IN SUPPORT OF COMPLAINT 1 I am a Special Agent with the Federal Bureau of Investigation and have been so employed since August of 1995 I am currently assigned to the Oklahoma City Division's Joint Terrorism Task Force where I investigate multiple violations of Federal law to include the investigation of economic espionage and theft of trade secrets I have gained experience in conducting these investigations through training seminars and day-to-day work related to investigations ofthis type 2 The facts in this affidavit come from my personal observations my training and experience and information obtained from other agents and witnesses This affidavit is intended to show merely that there is sufficient probable cause for the requested warrant and does not set forth all of my knowledge about this matter DESCRIPTION OF COMPANY A 3 Company A is a large international independent energy and petroleum corporation whose business focuses on exploration and development of petrochemical products and by-products and exploration and development of oil and natural gas Company A's technology is critical to its business 4 Company A protects its proprietary technology and processes through a multi-layered strategy involving both physical security as well as password protected entrance into varied computer systems COMPANY A'S PROPRIETARY TlbtDE-SECRET INFORMATION RELEVANT TO TIDS·AFFIDAVIT 5 Company A has a research facility in the Northern District of Oklahoma Company A sold and shipped and intended to sell and ship a specified Research and Development Downstream Energy Market Product hereafter referred to as Product A Company A has a facility in the Northern District of Oklahoma that is one of two refineries in the world to manufacture Product A 6 Company A has advised the FBI that the company has earned an estimated $1 4 to $1 8 billion from its sale of Product A Company A considers its methods of developing Product A to be trade secrets The economic value of Company A's methods of · developing Product A is tremendously significant and of great value to competitors HONGJINTAN 7 On 04 21 2017 Company A hired Hongjin Tan a citizen of The People' s Republic of China now a Legal Permanent Resident of the United States as a research engineer in Company A ' s battery development group in the Northern District of Oklahoma Among 1 other things Tan was responsible for research and development of Company A's battery program operation with the purpose of developing battery technology using Company A's pr prietary processes 8 Based on the resume Tan provided to Company A when he applied for employment Tan received a Bachelor of Science Degree in Physics from Nanjing University in Nanjing China 2006 and a Master's Degree and Doctorate Degree from the California Institute of Technology in Pasadena California 2011 COMPANY A CONTACT WITH THE FBI 9 On 12 13 2018 at approximately 12 19 p m Eastern Time a Company A representative called the FBI to report the theft of trade secrets The Company A representative provided the below information 10 On 12 12 2018 at approximately 10 30 a m Tan contacted his supervisor advised he was resigning from Company A and gave his two weeks' notice Tan told his supervisor that he was returning to China to be with his family as he is the only child to aging parents Tan told his supervisor that he did not currently have a job offer but was negotiating with a few battery companies in China 11 Tan's resignation prompted Company A to revoke his access to company systems and conduct a Systems Access review of Tan's computer activity 12 That review confirmed that Tan had accessed hundreds of files including research reports The reports included not only how to make Product A which according to Company A is a complicated and technically difficult process but also Company A's plans for marketing Product A in China and in cell phone and lithium-based battery systems These files included information that Company A considers to be trade secrets and outside the scope of Tan's employment with Company A The review revealed Tan downloaded restricted files to a personal thumb drive In the course of his regular duties and responsibilities Tan should have used his company issued laptop Tan did not have authorization to use a thumb drive to download Company A files Tan's supervisor confirmed that nothing in the downloaded files was within Tan's area of responsibility Further Company A confirmed through Tan's supervisor Tan did not have a work related need to access or download the restricted files 13 Based on that information Company A officials escorted Tan from Company A property and barred him from returning 14 Tan's supervisor then located Tan and escorted him to the supervisor's office Tan was advised that he would not be allowed to come to Company A to finish his two weeks of notice employment and was to leave Company A's property immediately Tan was allowed to retrieve his personal bag after it was searched and keys before he left 2 15 Later that day on 12 12 2018 at approximately 4 00 p m Tan sent the following text message to his supervisor Another Company A supervisor was asking if there is anything I have with me associated with company IP I have a memory disk that contains lab data that I plan to write report on and papers reports I plan to read at home Now that I have been exited from COMPANY A can you check what is the best way of handling the information and how sensitive they are Can I still read the papers reports from the memory disk 16 After receiving the above text from Tan Tan's supervisor asked him to return the flash drive which Tan's text message referred to as a memory disk to Company A 17 At approximately 5 15 pm on 12 12 18 Tan returned to the Research Technology Center at Company A where he provided a USB flash drive to his supervisor The USB flash drive was Tan's personal property which he was not authorized to utilize within Company A's space There is no record of Company A having issued a USB flash drive to Tan EVALUATION OF POTENTIAL LOSS OF COMPANY A'S TRADE SECRET INFORMATION 18 Upon reviewing the USB flash drive Company A determined the following the USB flash drive that was in Tan's possession outside of Company A ' s control contained data files that were owned solely by Company A and data on the USB flash drive that was in Tan's possession in deleted and undeleted files contained research documents which would have a tremendous impact to · Company A in terms of technological and economic loss if they were to be shared or given to a competing company Each page of the accessed document s was marked confidential and restricted 19 The review further revealed that the files were deleted on P 11 2018 the day before Tan's resignation Using commercially-available software Company A recovered and reviewed the deleted files Company A determined the disclosure of information in documents located on the USB Flash Drive would allow Company A's competitors with the technical knowledge and process to manufacture Product A 3 DESCRIPTION OF TAN'S CONTACT WITH COMPETITOR OF COMPANY A 20 On 12 13 2018 Tan had dinner with a former co-worker from Company A During this dinner Tan told the co-worker he was leaving Oklahoma on 12 27 2018 to return to China Tan told the co-worker that when he went to China in September 2018 he interviewed for a Chinese company hereafter referred to as Company B and had been in constant contact with the company since he was in graduate school at The California Institute of Technology 21 The following day 12 14 2018 the co-worker reported the conversation he had with Tan at dinner to a Company A official 22 According to the public website for Company B the company is located in Xiamen China According to the online company profile which is available in Chinese and English for Company B the company has developed two production lines so far one for Li-ion battery cathode materials such as lithium cobalt oxide ternary cathode material lithium manganese oxide lithium iron phosphate etc and the other for NiMH battery anode material Hydrogen storage alloy TAN'S FOREIGN TRAVEL 23 Affiant has located international travel records for Tan from the United States U S Customs and Border Protection and U S Department of Homeland Security These records confirm that on 09 15 2018 Tan traveled from the Dallas Ft Worth Texas International Airport to Peking China and arrived at the Beijing China Capital International Airport Tan'stravel records also confirm that on 09 30 2018 he returned to the Dallas Ft Worth Texas International Airport via the Beijing China Capital International Airport COMPANY A'S PROTECTION OF ITS TRADE SECRETS 24 Company A's methods of developing Product A were protected by Company A as confidential and proprietary information Company A considers this information to be a trade secret hereinafter referred to as the Trade Secret Information which was used in products sold and distributed in interstate or foreign commerce 25 Company A used a number of reasonable measures to protect the Trade Secret Information and its other confidential proprietary information including the following Company A restricted access to the controlled environment in Oklahoma where the Product A and battery research were conducted behind locked doors with magnetic card readers and only certain employees were granted access 4 Company A limited access to the Trade Secret Information to those who needed it to perform their employment duties Company A prohibited distribution of research products to other companies persons or countries or for research as a condition of their employment Company A employees executed non-disclosure and assignment agreements which specifically referenced Company A's confidential and proprietary information 26 Company A implemented data security policies stipulating that all information created sent received or stored on Company A's electronic resources was company property and that all activity on Company A's electronic resources was subject to monitoring Furthermore these policies prohibited employees from transmitting receiving or storing company information outside Company A's electronic resources 27 Affiant believes Tan was aware of Company A's m easures to protect their Trade Secret Information due to the agreements he signed with Company A pertaining to Confidential Information Non-Disclosure and Intellectual Property 28 As an example in the Confidential Information Non-Disclosure and Intellectual Property Agreement signed by Tan on 06 19 2018 Tan agreed among other things that without prior written consent of Company A he would not disclose use reproduce or transmit except for the performance of his duties for Company A or permit the unauthorized disclosure use reproduction or transmission of any Confidential Information during the period of his employment with Company A or at any time thereafter he would not upon leaving the employ of Company A take with him any records memoranda drawings pictures models papers notebooks reports computer disks or other similar media having Confidential Information in or on such media 29 Additionally Affiant believes Tan was reminded of his obligation per signed agreement with Company A when he would log in to his work computer 30 For example when an employee of Company A begins to access their computer at work the following warning appears on a screen banner before the employee can log m This is a private computer system to be accessed and used for Company A business purposes By accessing using and continuing to use this system or device you agree to the terms of use All access must be specifically authorized and used only in accordance with all applicable Company A policies Unauthorized access or use of this system is prohibited and may expose you to liability under criminal and civil laws Absent a separate written agreement all 5 non-personal information and content you create store or collect on behalf of Company A or in the scope of your employment on this computer system is the sole property of Company A To the extent permitted under local law Company A reserves the right to monitor access intercept records read copy capture and disclose all information received sent through or stored in this system or device without notice for any purpose and at any time 31 After the Company A employee successfully logs into Company A's computer systems the exact same warning appears on the computer screen under the heading LEGAL NOTICE 32 Heilbrun also advised it is not possible to successfully activate Company A ' s VPN without seeing the above described warning banners along with other warnmgs EMPLOYMENT OFFER FROM COMPANY B 33 On 12 19 2018 Tan's laptop computer that was issued to him by Company A was forensically examined by technically trained FBI computer analysts In the · examination a document was located that had been scanned into the laptop which was a letter written in the Chinese language 34 This letter was bearing a stamped logo of name of Company B and was dated 10 15 2018 At the bottom of the letter is a signature and the date of 10 17 2018 35 An image of this letter was submitted to an FBI Chinese linguist who roughly translated the text of the letter as follows This is a Position Hiring Agreement It states Mister TAN Hongjin will be the Energy New Material Engineering Center Director LT in Xiamen The letter includes his responsibilities in the management portion as well as his expertise area TAN's annual salary will be 800 000 RMB A soon as he starts he will be compensated 400 000 RMB for introducing the talent While you TAN are signing the contract you must guarantee that the information you have already provided and will provide is real and effective there is no false information verbatim translation TAN must promise the confidentiality that he has not released to a third party of the company technology and operational related information TAN must sign the agreement before 10 20 2018 and the agreement becomes valid on 1 1 2019 36 Affiant interprets the letter to mean Tan has been offered a position with Company B in Xia men China he has provided the company with talent that he is being paid 400 000RMB approximately $58 000 USD for and he must guarantee the information he provided is real and effective in addition to guaranteeing he has not provided it to a competing company Affiant also interprets the letter to mean Tan is 6 being given a substantial position with Company B for a 800 000 RMB salary which is the approximate equivalent of $116 000 USD 3 7 Affiant also notes the employment offer from Company B was made following his trip to China on 09 15 2018 Additionally in his exit interview Tan provided personnel at Company A with false information stating that he was returning to China to take care of his parents and he did not yet have employment despite his offer of employment with Company B 38 On 12 19 2018 United States Magistrate Judge for the Northern District of Oklahoma authorized a search warrant for Tan's residence That warrant is being executed at the time of the preparation of this Affidavit 39 Affiant has been notified a USB thumb drive has been located in Tan's house which contains documents belonging to Company A The Risk Assessment of these documents is currently underway · For the reasons stated above Affiant submits there is probable cause to arrest Hongjin Tan for violations of 18 U S C § 1832 a l a 2 and a 3 Theft of Trade Secrets Respectfully submitted s Clinton Judd cial Agent FBI Subscribed and sworn to before me this a y of December 2018 Hono r United States Magistrate Judge 7