Lei Gai, aka Jason Gao, has been indicted for stealing coiled tubing technology from a Houston-area manufacturing company. Also indicted were two corporations, Jason Energy Technologies in Yantai, China and Jason Oil & Gas Equipment LLC (JOG), based in Houston.
Also charged in relation to the case is Robert Erford, Jr of Dayton, Texas. He previously pleaded guilty to conspiracy to commit theft of trade secrets.
Erford was a production mill operator in the Dayton plant owned by a parent company, based in Houston. The plant and the company are not named in the indictment, but I believe them to be Global Tubing LLC, which is owned by Houston-based Forum Energy Technologies.
In April 2019, Erford first contacted JOG in Houston inquiring about managerial positions. It wasn’t until September that Gao responded and they agreed to meet up in Houston the following month.
During their second meeting, Gao suggested that Erford travel to China for a two-week consultancy assignment to assist the Chinese company with its manufacturing problems. Erford was asked to bring a small piece of sample material of advanced coil tubing.
One week assignment
Erford also took 120 photos of the Dayton facility, processes and data. This included unique chemical compositions for the raw material used in the plant. Erford eventually traveled to Beijng and visited the Chinese facility for 5 days over Thanksgiving 2019. In total, Erford was paid $8,500.
The sentencing for Erford is set for March 20121. At that time, he faces a prison term of up to five years and a fine of up to $250,000.
Gao previously resided in Houston but is now believed to be in China. A warrant remains outstanding for his arrest.
Not the first time
This is not the first time a Chinese company has stolen trade secrets from a Houston-area company by targeting production employees. Back in 2017, four employees from a Trelleborg plant in North Houston were indicted, along with a Chinese national.