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Posted: Nov 12, 2019 3:03 PMUpdated: Nov 13, 2019 9:55 AM

Tan Pleads Guilty to Stealing Phillips 66 Trade Secrets

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Garrett Giles

Hongjin Tan, a 35-year-old Chinese national and U.S. legal permanent resident, pleaded guilty Tuesday in federal court to committing theft of trade secrets from Phillips 66 Research and Technology Center in Bartlesville.

Tan pleaded guilty to theft of a trade secret, unauthorized transmission of a trade secret, and unauthorized possession of a trade secret. The defendant stole the information from the petroleum company regarding the manufacture of a “research and development downstream energy market product” that is worth more than $1 billion.

Tan was employed as an associate scientist for Phillips 66 starting in June 2017 until December 2018. The defendant was assigned to work within a group at the company with the goal of developing next generation battery technologies for stationary energy storage, specifically flow batteries. In his plea agreement, Tan admitted to intentionally copying and downloading research and development materials without authorization from his employer.

On Dec. 11th, 2018, Tan used a thumb drive to copy hundreds of files. He subsequently turned in his resignation to Phillips 66 and was escorted from the premises on Dec. 12th, 2018. Later that day, he returned the thumb drive, claiming that he had forgotten to do so before leaving his employer’s property.

Upon examination, it was discovered that there was unallocated space on the thumb drive, indicating five documents had previously been deleted. Investigators with the FBI searched Tan’s premises and found an external hard drive. They discovered that the same five missing files from the thumb drive had been downloaded to the hard drive.

Tan maintained the files on a hard drive so he could access the data at a later date. Further accessing the material would have been financially advantageous for Tan but caused significant financial damage to his Oklahoma employer.

U.S. District Judge Gregory K. Frizzell presided over the plea hearing and set sentencing for Feb. 12th, 2020.

The FBI conducted this investigation. Assistant U.S. Attorney Joel-lyn A. McCormick of the Northern District of Oklahoma and Trial Attorney Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Trial Attorney Matthew R. Walczewski and Assistant Deputy Chief Brian J. Resler of the Criminal Division’s Computer Crimes and Intellectual Property Section.

U.S. Attorney Trent Shores for the Northern District of Oklahoma said China’s economic aggression poses a threat to America’s emerging high-technology industries. He said industrial spies like Tan engage in espionage to steal American trade secrets and intellectual property born out of the innovation that is innate in our free market system.

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