1 00:00:00,920 --> 00:00:04,000 Speaker 1: So it's three layers of theft in the story. You've 2 00:00:04,040 --> 00:00:07,320 Speaker 1: got the person stealing the intellectual property, You've got the 3 00:00:07,360 --> 00:00:10,000 Speaker 1: people trying to set up a company based on the 4 00:00:10,039 --> 00:00:13,200 Speaker 1: stolen intellectual property, and then you've got the Chinese government. 5 00:00:13,440 --> 00:00:17,160 Speaker 1: And there is a parent fraud at each of those levels. 6 00:00:17,680 --> 00:00:21,919 Speaker 2: That's Bloomberg's Jordan Robertson. He and fellow reporter Drake Bennett 7 00:00:21,960 --> 00:00:25,840 Speaker 2: spent months chasing an international scheme to make off with 8 00:00:25,960 --> 00:00:30,560 Speaker 2: one of Coca Cola's most closely guarded secrets. And it's 9 00:00:30,680 --> 00:00:35,080 Speaker 2: not the one you're probably thinking of. I'm west Kasova. 10 00:00:35,360 --> 00:00:53,720 Speaker 2: That's today on the big Take, Drake. We all know 11 00:00:53,840 --> 00:00:56,880 Speaker 2: Coca Cola famous League guards its recipe. 12 00:00:57,000 --> 00:01:00,480 Speaker 3: The Coca Cola formula is written on a tiny green rice. 13 00:01:00,680 --> 00:01:03,880 Speaker 3: This grain of rice is inside a shell guarded by 14 00:01:03,920 --> 00:01:07,640 Speaker 3: two primate crabs, which are inside of grandmother's purse. We're 15 00:01:07,680 --> 00:01:09,440 Speaker 3: not going to tell you about formula is in it, 16 00:01:09,600 --> 00:01:12,120 Speaker 3: but we might tell you what. It doesn't have no 17 00:01:12,280 --> 00:01:14,520 Speaker 3: manic preservatives or artificial flavors. 18 00:01:14,760 --> 00:01:17,720 Speaker 2: But in this Business Week story that you and Jordan reported, 19 00:01:17,760 --> 00:01:21,040 Speaker 2: you found a whole other kind of formula that Coke 20 00:01:21,200 --> 00:01:23,880 Speaker 2: is really protective of. And for pretty good reason. 21 00:01:24,760 --> 00:01:27,800 Speaker 4: At the heart of the story is a technology that's 22 00:01:28,240 --> 00:01:31,800 Speaker 4: all but invisible to most of us, but also ubiquitous 23 00:01:31,959 --> 00:01:36,840 Speaker 4: and extraordinarily valuable. And it's this two micron thick polymer 24 00:01:36,880 --> 00:01:40,399 Speaker 4: lining that goes inside every can of coke that the 25 00:01:40,440 --> 00:01:41,800 Speaker 4: Coca Cola company. 26 00:01:41,640 --> 00:01:42,800 Speaker 5: Fills and sells. 27 00:01:43,360 --> 00:01:47,680 Speaker 4: And the reason you need that liner is because otherwise coke, 28 00:01:47,760 --> 00:01:53,440 Speaker 4: which is this sugary, acidic brew, would devour the aluminum 29 00:01:53,440 --> 00:01:57,120 Speaker 4: can that it's put into. You'd also have issues about 30 00:01:57,160 --> 00:02:02,000 Speaker 4: the taste of these very minutely calibrated things like Topo 31 00:02:02,160 --> 00:02:05,560 Speaker 4: Chico hard Seltzer being somehow corrupted as it sits on 32 00:02:05,600 --> 00:02:09,840 Speaker 4: supermarket shelves. So it's a very important but very little 33 00:02:09,840 --> 00:02:11,520 Speaker 4: known technology. 34 00:02:11,560 --> 00:02:14,640 Speaker 2: And developing those liners is really difficult. 35 00:02:15,320 --> 00:02:20,520 Speaker 4: Yes, there's this whole world of liners and membranes and 36 00:02:20,639 --> 00:02:25,079 Speaker 4: coatings that basically cover all of the surfaces around us, 37 00:02:25,320 --> 00:02:28,079 Speaker 4: whether it's a key on a keyboard or a touchscreen. 38 00:02:28,520 --> 00:02:32,080 Speaker 4: There are special paints that protect bridges from corroding and 39 00:02:32,160 --> 00:02:36,280 Speaker 4: salty air. There are special paints that keep stealth bombers stealthy. 40 00:02:36,840 --> 00:02:40,600 Speaker 4: There are special paints that go on ships and kill 41 00:02:40,720 --> 00:02:44,120 Speaker 4: all the barnacles that would otherwise totally cover those shiphulls. 42 00:02:44,560 --> 00:02:47,440 Speaker 4: There's a lot of really interesting technologies out of sight 43 00:02:47,520 --> 00:02:51,920 Speaker 4: of most consumers, and can liners are a particularly tricky 44 00:02:52,000 --> 00:02:55,960 Speaker 4: problem because it's got to not mess with the chemistry 45 00:02:56,000 --> 00:02:58,519 Speaker 4: of the drink itself or the food. You know, there's 46 00:02:58,560 --> 00:03:02,640 Speaker 4: also tuna can liners, soup can liners. But also these 47 00:03:02,639 --> 00:03:06,639 Speaker 4: things have to be applied in seconds in these gigantic 48 00:03:07,120 --> 00:03:11,000 Speaker 4: can factories that are producing you know, millions of cans 49 00:03:11,040 --> 00:03:13,480 Speaker 4: a day, so they get sprayed on. They have to 50 00:03:13,560 --> 00:03:17,000 Speaker 4: drive perfectly in this perfect layer around these very irregularly 51 00:03:17,000 --> 00:03:21,760 Speaker 4: shaped objects. So it's a real chemistry engineering problem and 52 00:03:22,040 --> 00:03:25,320 Speaker 4: there's a lot of research and money that goes into 53 00:03:25,320 --> 00:03:25,920 Speaker 4: developing it. 54 00:03:26,919 --> 00:03:31,600 Speaker 1: And as the world's biggest carbonated soft drink maker, Coke 55 00:03:31,680 --> 00:03:35,080 Speaker 1: occupies a really unique position in this ecosystem. Coke is 56 00:03:35,120 --> 00:03:37,520 Speaker 1: the king maker. One of the things that we found 57 00:03:37,520 --> 00:03:39,640 Speaker 1: interesting is that, you know, Coke has to have a 58 00:03:39,680 --> 00:03:45,280 Speaker 1: department that evaluates these technologies. Coke actually doesn't make these liners. 59 00:03:45,400 --> 00:03:48,640 Speaker 1: You know, Coke evaluates these liners. Coke sets the standards 60 00:03:48,640 --> 00:03:51,760 Speaker 1: for these liners, and then companies compete for their business. 61 00:03:51,800 --> 00:03:55,600 Speaker 1: You know what, Coting's company wouldn't want to be inside 62 00:03:55,960 --> 00:03:57,720 Speaker 1: hundreds of millions of Coke cans. 63 00:03:58,280 --> 00:04:00,480 Speaker 4: And to that point, part of the reason and that 64 00:04:00,560 --> 00:04:03,640 Speaker 4: this particular formulation we're talking about was so valuable is 65 00:04:03,680 --> 00:04:07,760 Speaker 4: because there was a moment several years ago when research 66 00:04:07,800 --> 00:04:11,000 Speaker 4: started coming out about this one ingredient that was ubiquitous 67 00:04:11,040 --> 00:04:14,480 Speaker 4: in these liners, which was something called disciphonnel a or BPA, 68 00:04:15,040 --> 00:04:18,360 Speaker 4: and there are these worries about the health effects of it. 69 00:04:18,360 --> 00:04:21,480 Speaker 4: It seems to do things to your inderconsystem, might give 70 00:04:21,520 --> 00:04:25,480 Speaker 4: you diabetes, might alter when kids go into puberty. So 71 00:04:26,279 --> 00:04:32,200 Speaker 4: countries and states started banning this ingredient. And BPA turns 72 00:04:32,200 --> 00:04:37,240 Speaker 4: out to be an extremely valuable molecule for making these 73 00:04:37,480 --> 00:04:40,279 Speaker 4: high tech liners, and so it was very difficult and 74 00:04:40,400 --> 00:04:43,479 Speaker 4: very time consuming to figure out how to reformulate them 75 00:04:43,760 --> 00:04:47,000 Speaker 4: without BPA. So a lot of what Coke was doing 76 00:04:47,080 --> 00:04:49,760 Speaker 4: a few years ago was trying to figure out whether 77 00:04:49,880 --> 00:04:53,400 Speaker 4: these new BPA free liners were okay to put in 78 00:04:53,440 --> 00:04:54,320 Speaker 4: their products. 79 00:04:54,800 --> 00:04:59,640 Speaker 2: And at Coke Jordan, the person who was in charge 80 00:05:00,080 --> 00:05:03,520 Speaker 2: of figuring out what kind of liner to use and 81 00:05:03,600 --> 00:05:09,240 Speaker 2: what was the best formula was someone named Shannon Yo. 82 00:05:09,440 --> 00:05:12,720 Speaker 1: Shannon Yo was an employee of the Coca Cola company. 83 00:05:13,320 --> 00:05:16,800 Speaker 1: She worked at their Atlanta headquarters. She is a chemist 84 00:05:17,320 --> 00:05:22,680 Speaker 1: chemical engineer. She understands complex chemical molecules, and her job 85 00:05:22,800 --> 00:05:28,120 Speaker 1: was to help evaluate the BPA free codings that Coke's 86 00:05:28,240 --> 00:05:33,000 Speaker 1: suppliers were developing. She alone didn't get to decide whether 87 00:05:33,040 --> 00:05:36,279 Speaker 1: those codings won the contract with Coke or not, but 88 00:05:36,400 --> 00:05:40,080 Speaker 1: she occupied a very important position in that supply chain 89 00:05:40,160 --> 00:05:44,240 Speaker 1: because she got to decide which of these companies' codings 90 00:05:44,440 --> 00:05:47,400 Speaker 1: went up the chain for further review. So she had 91 00:05:47,400 --> 00:05:49,960 Speaker 1: a lot of power, even though she was not an executive. 92 00:05:50,279 --> 00:05:53,320 Speaker 1: There's no indication she managed anybody. You know, she had 93 00:05:53,320 --> 00:05:57,120 Speaker 1: this innocuous title. Shannon Yo's title was principal engineer in 94 00:05:57,160 --> 00:06:00,200 Speaker 1: the Global Research Division. She's not an executive, she's not 95 00:06:00,240 --> 00:06:02,480 Speaker 1: sea level like, She's not somebody you would think would 96 00:06:02,480 --> 00:06:06,400 Speaker 1: have this power. She was kind of an individual contributor, 97 00:06:06,400 --> 00:06:08,839 Speaker 1: if you will, and she had a lot of say 98 00:06:09,440 --> 00:06:13,520 Speaker 1: over whether these companies BPA free codings would be successful 99 00:06:13,600 --> 00:06:13,800 Speaker 1: or not. 100 00:06:14,480 --> 00:06:17,680 Speaker 4: She was born and raised in China, went to college there, 101 00:06:18,480 --> 00:06:22,080 Speaker 4: came to the US for her graduate studies, got a 102 00:06:22,080 --> 00:06:28,120 Speaker 4: PhD in materials chemistry, and had a pretty impressive career. 103 00:06:28,200 --> 00:06:33,480 Speaker 4: She invented some pretty cool sort of abrasive technologies, some coatings, 104 00:06:33,839 --> 00:06:37,480 Speaker 4: this one laser proof coating that went on safety goggles. 105 00:06:37,800 --> 00:06:40,839 Speaker 4: She was hired in twenty twelve by Coke in Atlanta 106 00:06:41,240 --> 00:06:43,800 Speaker 4: to be this kind of gatekeeper to their scientific and 107 00:06:43,839 --> 00:06:48,240 Speaker 4: regulatory Affairs committee, and as it turns out, that's an 108 00:06:48,279 --> 00:06:53,000 Speaker 4: extremely powerful perch because Coke is such an important company 109 00:06:53,160 --> 00:06:59,240 Speaker 4: for these coding suppliers. Pretty early on, if not immediately, 110 00:07:00,080 --> 00:07:05,080 Speaker 4: the relationship between Coke and those suppliers' changes. She starts 111 00:07:05,080 --> 00:07:07,960 Speaker 4: demanding a lot more information than those companies had previously 112 00:07:08,000 --> 00:07:12,320 Speaker 4: had to give Coke, very specific recipe type information about 113 00:07:12,360 --> 00:07:16,360 Speaker 4: exactly what went into these codings. So she wasn't interested 114 00:07:16,480 --> 00:07:19,000 Speaker 4: just in how these coatings performed when they were in 115 00:07:19,080 --> 00:07:21,840 Speaker 4: a Coke can, which is her job, but these other 116 00:07:21,920 --> 00:07:25,080 Speaker 4: sort of questions that would be more relevant if, for example, 117 00:07:25,080 --> 00:07:28,200 Speaker 4: you're trying to create your own codings. The relationship got 118 00:07:28,320 --> 00:07:31,360 Speaker 4: bad enough that these very senior executives at these coding 119 00:07:31,400 --> 00:07:34,520 Speaker 4: companies were having to intervene and figure out how to 120 00:07:34,560 --> 00:07:37,640 Speaker 4: manage this relationship. So not only that, but she was 121 00:07:37,760 --> 00:07:42,280 Speaker 4: extremely abrasive in her dealings with these coding companies and 122 00:07:42,920 --> 00:07:48,240 Speaker 4: basically would strong arm them into sending her these extremely 123 00:07:48,320 --> 00:07:52,960 Speaker 4: valuable proprietary formulas and strong armed them into signing these 124 00:07:53,360 --> 00:07:57,720 Speaker 4: special non disclosure agreements that covered just her, so which 125 00:07:57,720 --> 00:08:04,440 Speaker 4: is extremely unusual. Over time, she developed this collection of 126 00:08:04,480 --> 00:08:09,520 Speaker 4: these formulas and basically her computer at Coke was the 127 00:08:09,560 --> 00:08:12,600 Speaker 4: only place on the planet where all of these companies 128 00:08:12,680 --> 00:08:17,400 Speaker 4: extremely highly protected proprietary information co existed and she. 129 00:08:17,440 --> 00:08:19,600 Speaker 2: Had sole control over all of. 130 00:08:19,520 --> 00:08:23,640 Speaker 4: These Some of these decisions did involve a supervisor, but 131 00:08:23,680 --> 00:08:27,360 Speaker 4: it seems like she was running her own shop within Coke, 132 00:08:28,040 --> 00:08:33,200 Speaker 4: using Coke's leverage as this giant partner for these Codings companies. 133 00:08:33,800 --> 00:08:37,640 Speaker 2: Jordan, why was she collecting all of these codings into 134 00:08:37,720 --> 00:08:40,760 Speaker 2: kind of a personal library. 135 00:08:40,880 --> 00:08:43,280 Speaker 1: You could make the argument, and Shannon Yo did make 136 00:08:43,320 --> 00:08:46,760 Speaker 1: this argument that she needed to know exactly what was 137 00:08:46,800 --> 00:08:49,280 Speaker 1: in these formulations because they were going to go into 138 00:08:49,320 --> 00:08:52,160 Speaker 1: products that were going to be consumed by people, and 139 00:08:52,240 --> 00:08:56,760 Speaker 1: these were novel chemistries involved here. These Codings companies we learned, 140 00:08:56,760 --> 00:08:59,319 Speaker 1: you know, through the reporting, they already shared a lot 141 00:08:59,360 --> 00:09:02,880 Speaker 1: of information with Coke. They really very badly wanted Coke 142 00:09:02,960 --> 00:09:04,199 Speaker 1: to use their products. 143 00:09:04,600 --> 00:09:07,000 Speaker 4: One answer to that question is that the whole time 144 00:09:07,040 --> 00:09:11,280 Speaker 4: she was at Coke taking this information, she was also 145 00:09:11,440 --> 00:09:14,800 Speaker 4: thinking and talking to partners about going off on her 146 00:09:14,800 --> 00:09:18,480 Speaker 4: own and starting her own coding company in China. What 147 00:09:18,559 --> 00:09:21,920 Speaker 4: emerges she has an aunt in China who seems to 148 00:09:21,960 --> 00:09:24,240 Speaker 4: be maybe the person who came up with this idea, 149 00:09:24,360 --> 00:09:27,560 Speaker 4: but very much a partner in it, and their plan 150 00:09:27,800 --> 00:09:32,000 Speaker 4: is There are these Chinese government programs, provincial level programs, 151 00:09:32,120 --> 00:09:35,599 Speaker 4: national level programs. The best known program is called the 152 00:09:35,640 --> 00:09:39,679 Speaker 4: Thousand Talents Program. It's a national program and the purported 153 00:09:39,720 --> 00:09:45,520 Speaker 4: purpose of it is to incentivize Chinese scientists, Chinese engineers 154 00:09:45,559 --> 00:09:48,320 Speaker 4: who have gone abroad to get an education to work 155 00:09:48,360 --> 00:09:51,600 Speaker 4: at tech firms, engineering firms, to get those people to 156 00:09:51,640 --> 00:09:54,520 Speaker 4: come back to China and start companies there to bring 157 00:09:54,600 --> 00:09:57,520 Speaker 4: back some of this knowledge and experience and help China's 158 00:09:57,520 --> 00:10:01,040 Speaker 4: economy grow. What critics of the program, including a lot 159 00:10:01,080 --> 00:10:06,120 Speaker 4: of folks in the FBI and the American counterintelligence community, 160 00:10:06,520 --> 00:10:08,600 Speaker 4: what those critics would say is that the other thing 161 00:10:08,640 --> 00:10:11,800 Speaker 4: these programs do is they basically work as bounties to 162 00:10:12,160 --> 00:10:16,160 Speaker 4: get people to steal ip from non Chinese companies and 163 00:10:16,280 --> 00:10:21,800 Speaker 4: use those as the crown jewels of Chinese competitors. Shannon 164 00:10:21,880 --> 00:10:25,560 Speaker 4: Yo and her aunt, Fan Hung Mei were very interested 165 00:10:25,600 --> 00:10:29,200 Speaker 4: in getting that money to start their codings company in China, 166 00:10:29,520 --> 00:10:32,520 Speaker 4: and so a lot of their correspondence while Shannon is 167 00:10:32,600 --> 00:10:36,520 Speaker 4: at Coke, while she is taking this material that belongs 168 00:10:36,559 --> 00:10:41,040 Speaker 4: to Coke's partners, they're talking about getting thousand talents program 169 00:10:41,080 --> 00:10:43,600 Speaker 4: money and how they're going to set up this company 170 00:10:43,679 --> 00:10:46,960 Speaker 4: to compete against the codings companies that Coke works with. 171 00:10:47,800 --> 00:10:52,280 Speaker 2: After the break, Shannon Yo gets creative with her resume. 172 00:11:01,040 --> 00:11:20,560 Speaker 6: Copy in the one. 173 00:11:02,360 --> 00:11:17,120 Speaker 1: That there's billions of dollars available in China for all 174 00:11:17,200 --> 00:11:21,240 Speaker 1: kinds of investment opportunities for companies, and this was central 175 00:11:21,400 --> 00:11:25,240 Speaker 1: to the desired creation of a Chinese you know, coding's company. 176 00:11:25,640 --> 00:11:29,680 Speaker 1: So essentially, the first order of business was for Shannon 177 00:11:29,800 --> 00:11:33,640 Speaker 1: Yo and her partners in China to create applications for 178 00:11:33,720 --> 00:11:37,400 Speaker 1: these government programs to convince both the national and the 179 00:11:37,480 --> 00:11:41,640 Speaker 1: provincial governments to give her and her partners potentially millions 180 00:11:41,679 --> 00:11:42,200 Speaker 1: of dollars. 181 00:11:42,800 --> 00:11:45,800 Speaker 4: It is exactly the sort of industry that these grants 182 00:11:45,840 --> 00:11:49,240 Speaker 4: are meant for, in that it's a big market. There 183 00:11:49,320 --> 00:11:52,400 Speaker 4: isn't a Chinese company making these codings, and they all 184 00:11:52,440 --> 00:11:55,480 Speaker 4: have to buy them from overseas, from these giant global 185 00:11:55,520 --> 00:12:00,400 Speaker 4: corporations and so her purport adventure would be filling this need. 186 00:12:01,080 --> 00:12:04,000 Speaker 1: Shannon Yo and her partners knew that they had something 187 00:12:04,040 --> 00:12:09,120 Speaker 1: really valuable, which was a market that was difficult to penetrate, 188 00:12:09,360 --> 00:12:13,800 Speaker 1: difficult to replicate, and somebody who now had access to 189 00:12:14,200 --> 00:12:18,000 Speaker 1: the actual chemistries, the most cutting edge chemistries for some 190 00:12:18,080 --> 00:12:21,880 Speaker 1: of the world's biggest coding companies. She had that and 191 00:12:22,200 --> 00:12:24,840 Speaker 1: her job. The first order of business was to pitch 192 00:12:25,240 --> 00:12:27,959 Speaker 1: the Chinese government at the national and the provincial level. 193 00:12:28,679 --> 00:12:31,920 Speaker 4: Shannon's aunt connects her pretty early on in this process 194 00:12:32,040 --> 00:12:35,079 Speaker 4: with a gentleman named lu Juan Chen who works at 195 00:12:35,080 --> 00:12:39,680 Speaker 4: a Chinese chemical company. He becomes their kind of guide 196 00:12:39,920 --> 00:12:42,840 Speaker 4: to not only setting up the new company, but also 197 00:12:43,600 --> 00:12:46,640 Speaker 4: getting as much money as possible out of the Chinese 198 00:12:46,640 --> 00:12:48,680 Speaker 4: government for that purpose. And one of the things he 199 00:12:48,720 --> 00:12:53,680 Speaker 4: seems to specialize in is application fraud. Basically, some of 200 00:12:53,720 --> 00:12:55,560 Speaker 4: what he does is these kind of tweaks. You know, 201 00:12:55,640 --> 00:12:58,000 Speaker 4: he wants me to take a flattering photograph of herself 202 00:12:58,080 --> 00:13:01,440 Speaker 4: for the application other things. Basically like he asks her 203 00:13:01,520 --> 00:13:03,680 Speaker 4: of say that she's the chief technology officer of a 204 00:13:03,679 --> 00:13:06,120 Speaker 4: fortune five hundred company, which is very very far from 205 00:13:06,120 --> 00:13:12,000 Speaker 4: what she is. He crafts this fake patent agreement that 206 00:13:12,160 --> 00:13:17,360 Speaker 4: would give the liner technology that Coke uses to the 207 00:13:17,440 --> 00:13:19,640 Speaker 4: Chinese company he works for and the company that would 208 00:13:19,640 --> 00:13:22,600 Speaker 4: be partnering with the new Chinese company. But it's not 209 00:13:22,640 --> 00:13:26,840 Speaker 4: only fraudulent, it's nonsensical because these aren't really Cokes formulas 210 00:13:26,840 --> 00:13:29,000 Speaker 4: in the first place to give. So this kind of 211 00:13:29,120 --> 00:13:32,960 Speaker 4: bundle of true and made up stuff becomes the application 212 00:13:33,120 --> 00:13:38,120 Speaker 4: for these programs, and it's successful. A combination of Shannon's 213 00:13:38,160 --> 00:13:42,439 Speaker 4: real resume and the kind of wild exaggerations get them 214 00:13:42,440 --> 00:13:45,280 Speaker 4: to sail through the process and they get not only 215 00:13:45,280 --> 00:13:48,600 Speaker 4: the provincial money but the national money, and things kind 216 00:13:48,600 --> 00:13:49,920 Speaker 4: of proceed from there. 217 00:13:51,120 --> 00:13:54,480 Speaker 2: And you write that Shannon Yo was awarded a total 218 00:13:54,480 --> 00:13:58,040 Speaker 2: of five million yuan in grants about seven hundred and 219 00:13:58,080 --> 00:14:03,360 Speaker 2: twenty thousand US dollars, and the company was also awarded grants, 220 00:14:03,440 --> 00:14:06,319 Speaker 2: and she believed about eight hundred thousand US dollars worth 221 00:14:06,360 --> 00:14:08,000 Speaker 2: of that was paid up front. 222 00:14:09,440 --> 00:14:12,319 Speaker 4: So meanwhile, back at her day job at Coke, things 223 00:14:12,360 --> 00:14:14,920 Speaker 4: are not going great. One of the things about Shannon 224 00:14:14,920 --> 00:14:17,160 Speaker 4: that's really striking is that, especially for someone who is 225 00:14:17,160 --> 00:14:19,920 Speaker 4: trying to do something under the table at her job, 226 00:14:20,040 --> 00:14:23,800 Speaker 4: is that all of her co workers remember her as 227 00:14:23,840 --> 00:14:28,680 Speaker 4: this extremely loud, fairly abrasive personality. So everyone who worked 228 00:14:28,680 --> 00:14:31,200 Speaker 4: with her kind of had these stories about how loud 229 00:14:31,240 --> 00:14:34,040 Speaker 4: she was on the phone, how clearly unpleasant all the 230 00:14:34,080 --> 00:14:37,280 Speaker 4: conversations she had with these coding companies always were. 231 00:14:37,680 --> 00:14:39,160 Speaker 5: She was basically unforgettable. 232 00:14:39,560 --> 00:14:42,880 Speaker 4: At the same time, she's basically trying to spirit away 233 00:14:43,000 --> 00:14:46,400 Speaker 4: this stuff that was the proprietory information of these partners 234 00:14:46,400 --> 00:14:51,600 Speaker 4: of Cokes. So eventually at Coke, this starts to catch 235 00:14:51,680 --> 00:14:55,800 Speaker 4: up with her, and she's laid off and it's part 236 00:14:55,840 --> 00:14:59,320 Speaker 4: of this larger restructuring, but she's laid off and then 237 00:14:59,360 --> 00:15:02,240 Speaker 4: realizes that she's going to have to take this ip 238 00:15:02,600 --> 00:15:06,240 Speaker 4: with her. There's this period of time before she leaves Coke, 239 00:15:06,280 --> 00:15:08,240 Speaker 4: but after she knows she's going to have to leave Coke, 240 00:15:08,280 --> 00:15:11,280 Speaker 4: where she keeps trying to get this stuff off of 241 00:15:11,320 --> 00:15:16,480 Speaker 4: the Coke system onto various hard drives, and she's thwarted 242 00:15:16,600 --> 00:15:19,040 Speaker 4: up to a point by these security measures that Coke 243 00:15:19,080 --> 00:15:21,680 Speaker 4: has sort of put in place. She eventually gets around them. 244 00:15:21,800 --> 00:15:23,680 Speaker 4: The way she does it is not particularly high tech. 245 00:15:23,800 --> 00:15:26,000 Speaker 4: She just has these files open on her work computer 246 00:15:26,040 --> 00:15:28,640 Speaker 4: and takes pictures of them with her phone. 247 00:15:28,800 --> 00:15:33,160 Speaker 2: Jordan what he'd Coke say about Shannon Yo and all 248 00:15:33,240 --> 00:15:33,600 Speaker 2: of this. 249 00:15:35,000 --> 00:15:38,480 Speaker 1: Coke declined to comment about detailed questions about this case. 250 00:15:39,240 --> 00:15:42,840 Speaker 4: And she immediately gets a job at another chemical company 251 00:15:42,840 --> 00:15:45,520 Speaker 4: that supplies Coke called Eastman Chemical. 252 00:15:46,160 --> 00:15:50,880 Speaker 1: Unfortunately for Shannon, she's no longer in the can coatings business. 253 00:15:51,320 --> 00:15:54,560 Speaker 1: She's now in the food packaging side of the house. 254 00:15:55,040 --> 00:15:59,360 Speaker 1: The reason that's important is as unforgettable as Shannon was 255 00:15:59,440 --> 00:16:03,920 Speaker 1: at Coke, she almost immediately makes herself unforgettable and Eastman 256 00:16:03,960 --> 00:16:06,600 Speaker 1: as well because she's on the food packaging side of 257 00:16:06,600 --> 00:16:10,200 Speaker 1: the house. But she's constantly wandering around and poking her 258 00:16:10,240 --> 00:16:13,040 Speaker 1: nose into the can side of the house where she 259 00:16:13,040 --> 00:16:16,200 Speaker 1: has no business working. Her boss has noticed this. It's 260 00:16:16,240 --> 00:16:19,440 Speaker 1: just kind of odd behavior. There are some complaints from 261 00:16:19,520 --> 00:16:22,560 Speaker 1: team members about her personality. So again, she's not starting 262 00:16:22,560 --> 00:16:25,160 Speaker 1: on a great footing, but she was hired as an 263 00:16:25,200 --> 00:16:27,480 Speaker 1: expert in some of these chemistries. 264 00:16:27,480 --> 00:16:31,200 Speaker 4: And these former partners of Cokes, when they get wind 265 00:16:31,320 --> 00:16:34,880 Speaker 4: that she's moved to Eastman, immediately fire off these panicked 266 00:16:34,960 --> 00:16:40,800 Speaker 4: letters to Eastman, reminding the company that Shannon cannot use 267 00:16:40,880 --> 00:16:45,600 Speaker 4: any of the proprietary information that she had strong armed 268 00:16:45,600 --> 00:16:47,600 Speaker 4: them into giving her. When she was at Coke, so 269 00:16:47,640 --> 00:16:50,480 Speaker 4: there's this sense that her reputation comes along with her. 270 00:16:52,080 --> 00:16:54,240 Speaker 1: It's the worst way to start a new job. I mean, 271 00:16:54,280 --> 00:16:57,520 Speaker 1: the people she worked with at Coke are now all 272 00:16:57,520 --> 00:17:01,440 Speaker 1: calling Eastman and telling them like, this is a very 273 00:17:01,720 --> 00:17:04,480 Speaker 1: challenging person to work with and we don't want to 274 00:17:04,480 --> 00:17:06,240 Speaker 1: work with her. She's not going to be part of 275 00:17:06,280 --> 00:17:10,200 Speaker 1: any of our accounts. But yet Eastman continued to send 276 00:17:10,200 --> 00:17:14,359 Speaker 1: her on assignments. But as this is happening, the project 277 00:17:14,400 --> 00:17:17,960 Speaker 1: in China is kind of coming undone a little bit. 278 00:17:18,400 --> 00:17:21,520 Speaker 1: The grant money from the Chinese government was approved, but 279 00:17:21,600 --> 00:17:24,080 Speaker 1: not at the levels that Shannon and her partners in 280 00:17:24,160 --> 00:17:26,639 Speaker 1: China expected it to be, and that all kinds of 281 00:17:26,680 --> 00:17:30,800 Speaker 1: divisions and frictions start happening between Shannon and her partners 282 00:17:30,840 --> 00:17:33,800 Speaker 1: at China. So she's still trying to salvage it though. 283 00:17:33,880 --> 00:17:37,399 Speaker 1: She's still trying to hit the finish line get the 284 00:17:37,440 --> 00:17:41,520 Speaker 1: money into her account while navigating this new job where 285 00:17:41,560 --> 00:17:43,480 Speaker 1: she's just not where she feels she needs to be. 286 00:17:44,080 --> 00:17:47,199 Speaker 1: So Shannon gets approved for a ten day trip to 287 00:17:47,280 --> 00:17:51,280 Speaker 1: China for her day job for Eastman. On that trip, 288 00:17:51,400 --> 00:17:55,560 Speaker 1: that's when Shannon Yo signs the contract that she needs 289 00:17:55,600 --> 00:17:58,679 Speaker 1: to to get her money and get her Chinese business 290 00:17:58,800 --> 00:18:02,200 Speaker 1: up and running. US notice because she's gone for a month, 291 00:18:02,720 --> 00:18:05,560 Speaker 1: she's been authorized a trip for under two weeks, she's 292 00:18:05,560 --> 00:18:08,480 Speaker 1: gone for several weeks. After that, they start raising questions 293 00:18:08,520 --> 00:18:10,920 Speaker 1: about what she's doing in China, and then her new 294 00:18:10,960 --> 00:18:14,199 Speaker 1: bosses at Eastman really start to have some concerns about 295 00:18:14,200 --> 00:18:17,160 Speaker 1: what this employee is doing. But she still has her job. 296 00:18:17,320 --> 00:18:20,159 Speaker 1: She's not fired over it. In fact, she's questioned about it, 297 00:18:20,520 --> 00:18:24,400 Speaker 1: and that's when things for Shannon really start to take 298 00:18:24,440 --> 00:18:24,840 Speaker 1: a turn. 299 00:18:25,560 --> 00:18:29,240 Speaker 4: What gets her in trouble at Eastman isn't really the 300 00:18:29,359 --> 00:18:33,320 Speaker 4: intellectual property issues so much as there are these vague 301 00:18:33,359 --> 00:18:36,800 Speaker 4: concerns about her taking this long trip and what's she doing, 302 00:18:37,200 --> 00:18:40,520 Speaker 4: and when they're raised with her, she basically gets extraordinarily 303 00:18:40,560 --> 00:18:42,960 Speaker 4: angry but rates her supervisor. 304 00:18:43,480 --> 00:18:44,880 Speaker 5: And then there's this. 305 00:18:44,840 --> 00:18:47,440 Speaker 4: Meeting to kind of like check in with Shannon, how's 306 00:18:47,480 --> 00:18:50,600 Speaker 4: she doing in her first year? It goes extremely badly, 307 00:18:51,080 --> 00:18:55,760 Speaker 4: and this HR representative, as HR representatives do, kind of 308 00:18:55,880 --> 00:18:57,880 Speaker 4: tries the cool things down and says, Shannon, why don't 309 00:18:57,880 --> 00:18:59,840 Speaker 4: you go work from home for the US to the day. 310 00:19:00,280 --> 00:19:03,800 Speaker 4: And Shannon leaves the building and instead of going home, 311 00:19:03,840 --> 00:19:06,320 Speaker 4: she goes to the executive offices of Eastman, which is 312 00:19:06,320 --> 00:19:09,920 Speaker 4: a fourteen thousand person company. She badges into that building 313 00:19:10,200 --> 00:19:13,160 Speaker 4: and goes looking for her supervisor supervisor so she can 314 00:19:13,359 --> 00:19:16,760 Speaker 4: presumably make the case to that person, can't find them, 315 00:19:16,800 --> 00:19:19,159 Speaker 4: and then decides to just take her case to the 316 00:19:19,240 --> 00:19:22,760 Speaker 4: chief technology officer of the company. Is informed that that 317 00:19:22,800 --> 00:19:25,879 Speaker 4: person is in a meeting, tries to interrupt the meeting, 318 00:19:25,960 --> 00:19:29,640 Speaker 4: and finally is told to leave the building by security, 319 00:19:29,720 --> 00:19:30,720 Speaker 4: and then does. 320 00:19:31,320 --> 00:19:35,120 Speaker 1: She's wandering the executive building for two hours, knocking on doors, 321 00:19:35,400 --> 00:19:38,760 Speaker 1: looking for the CTO, looking for her boss's boss, like 322 00:19:38,960 --> 00:19:41,280 Speaker 1: trying to find anybody she could make her case to. 323 00:19:41,800 --> 00:19:43,600 Speaker 4: I mean, she's making a spectacle of herself, which I 324 00:19:43,640 --> 00:19:46,200 Speaker 4: mean again, it's like this person that's sort of doing 325 00:19:46,240 --> 00:19:48,280 Speaker 4: this thing that relies very much on sort of like 326 00:19:48,359 --> 00:19:51,480 Speaker 4: stealth and not making a spectacle of herself, and yet 327 00:19:51,520 --> 00:19:53,320 Speaker 4: she on some level seems not to be able to 328 00:19:53,320 --> 00:19:53,920 Speaker 4: help herself. 329 00:19:54,160 --> 00:19:56,920 Speaker 1: And Shannon Yo had so many moments. There are multiple 330 00:19:56,960 --> 00:20:00,240 Speaker 1: moments in her story where she could have done a 331 00:20:00,320 --> 00:20:03,920 Speaker 1: different thing and we wouldn't be having this conversation. This 332 00:20:04,040 --> 00:20:05,840 Speaker 1: was a moment where she could have done a very 333 00:20:05,880 --> 00:20:09,520 Speaker 1: easy other thing and gone home. They weren't going to 334 00:20:09,560 --> 00:20:12,879 Speaker 1: fire Shannon Yoe over this China trip that went weeks 335 00:20:12,920 --> 00:20:15,000 Speaker 1: longer than it should have where she was unaccounted for. 336 00:20:15,280 --> 00:20:17,720 Speaker 1: They weren't even going to fire her for her outbursts 337 00:20:17,760 --> 00:20:21,520 Speaker 1: at her supervisor. Like apparently she was valued enough for 338 00:20:21,600 --> 00:20:23,960 Speaker 1: whatever she brought to the table that she would still 339 00:20:24,000 --> 00:20:27,520 Speaker 1: have her job. But her decision to leave that contentious 340 00:20:27,680 --> 00:20:31,439 Speaker 1: HR meeting march over to the executive offices, wander the 341 00:20:31,480 --> 00:20:34,720 Speaker 1: halls for two hours looking for her boss's boss's bosses 342 00:20:35,119 --> 00:20:37,600 Speaker 1: to make her case. That's what did her in right, 343 00:20:37,720 --> 00:20:40,040 Speaker 1: And it was at that point that Eastman HR decided, 344 00:20:40,560 --> 00:20:42,639 Speaker 1: we need to fire her. We need to fire her immediately. 345 00:20:43,080 --> 00:20:45,200 Speaker 1: Let's lock down her accounts, and let's get this done 346 00:20:45,280 --> 00:20:46,720 Speaker 1: with Drake. 347 00:20:46,760 --> 00:20:49,919 Speaker 2: What did Eastman say about Shan and Yoe. 348 00:20:50,320 --> 00:20:53,919 Speaker 4: Eastman didn't respond to detailed questions about the case, but 349 00:20:54,000 --> 00:20:57,240 Speaker 4: did issue a statement that they take intellectual property theft seriously. 350 00:20:58,160 --> 00:21:01,000 Speaker 4: One thing that Eastman did that Coke had not done, 351 00:21:01,119 --> 00:21:04,679 Speaker 4: which proves important, is that at this point the IT 352 00:21:05,119 --> 00:21:09,680 Speaker 4: department starts to keep tabs on her. So she goes 353 00:21:09,720 --> 00:21:12,119 Speaker 4: home and then Eastman is able to see that she 354 00:21:12,240 --> 00:21:15,719 Speaker 4: plugs an external hard drive into her work computer and 355 00:21:15,760 --> 00:21:19,080 Speaker 4: puts something on there, and so when she goes in 356 00:21:19,119 --> 00:21:22,160 Speaker 4: the next day to be fired, they make a point 357 00:21:22,200 --> 00:21:26,800 Speaker 4: of asking for that removable storage device, which after some 358 00:21:27,440 --> 00:21:29,920 Speaker 4: haming and hawing, she agrees to give them. And that 359 00:21:30,080 --> 00:21:34,440 Speaker 4: removable storage device, when examined, turns out to have all 360 00:21:34,520 --> 00:21:36,800 Speaker 4: of these can Liner formulas on it. 361 00:21:37,040 --> 00:21:37,520 Speaker 5: And at this. 362 00:21:37,600 --> 00:21:42,399 Speaker 4: Point Eastman's security department, which is run by a former 363 00:21:42,480 --> 00:21:45,440 Speaker 4: FBI agent, decides to involve law enforcement. 364 00:21:46,359 --> 00:21:59,040 Speaker 2: When we come back, the scheme starts to unravel, so 365 00:21:59,160 --> 00:22:01,320 Speaker 2: Eastman calls in the FBI. What happens. 366 00:22:01,359 --> 00:22:04,879 Speaker 4: Then Shannon Yo has been fired, and so now she 367 00:22:04,960 --> 00:22:07,640 Speaker 4: has all sorts of time to devote to her new 368 00:22:07,840 --> 00:22:11,760 Speaker 4: Lining's venture in China, and so she takes a couple 369 00:22:11,760 --> 00:22:15,600 Speaker 4: more trips, keeps trying to figure out why she hasn't 370 00:22:15,680 --> 00:22:18,200 Speaker 4: seen more of the grant money. And then at the 371 00:22:18,240 --> 00:22:20,800 Speaker 4: same time the FBI is starting to take a look 372 00:22:20,800 --> 00:22:24,200 Speaker 4: at this. They get search warrants on the external hard 373 00:22:24,280 --> 00:22:28,480 Speaker 4: drive that Shannon had to return to Eastman. They get 374 00:22:28,480 --> 00:22:30,680 Speaker 4: a search horn on her company phone that she also 375 00:22:30,760 --> 00:22:33,480 Speaker 4: returned to Eastman, and what they find on there are 376 00:22:34,000 --> 00:22:38,919 Speaker 4: these formulas, They find photographs on her phone that she 377 00:22:39,119 --> 00:22:42,439 Speaker 4: took of this specialized lab equipment in the Eastman labs, 378 00:22:42,800 --> 00:22:46,720 Speaker 4: and so the FBI starts piecing together what she's been doing. 379 00:22:47,119 --> 00:22:50,639 Speaker 1: When Eastman seesed that hard drive, they were looking for 380 00:22:50,760 --> 00:22:54,520 Speaker 1: Eastman intellectual property. They were not investigating anything that they 381 00:22:54,560 --> 00:22:57,600 Speaker 1: suspected to be a corporate espionage, you know. Matter they 382 00:22:57,600 --> 00:23:00,159 Speaker 1: were looking for, did Shannon Yo take any of are 383 00:23:00,160 --> 00:23:03,720 Speaker 1: intellectual property? But what they found were folders upon folders 384 00:23:03,760 --> 00:23:08,199 Speaker 1: of what seemed to be pretty valuable chemical formulas with 385 00:23:08,440 --> 00:23:12,600 Speaker 1: names of other chemical companies, and that's what they gave 386 00:23:12,640 --> 00:23:15,000 Speaker 1: to the FBI. And what the FBI was doing is 387 00:23:15,040 --> 00:23:17,600 Speaker 1: all of this was happening. The FBI was taking that 388 00:23:17,760 --> 00:23:20,200 Speaker 1: data to those companies and saying, what is this? 389 00:23:20,640 --> 00:23:21,520 Speaker 5: Is this valuable? 390 00:23:21,800 --> 00:23:24,679 Speaker 1: Those companies were coming back and saying, absolutely, those are 391 00:23:24,680 --> 00:23:28,280 Speaker 1: our trade secrets. Nobody should have that information. So at 392 00:23:28,280 --> 00:23:31,479 Speaker 1: that point the FBI knew shan and Yo has taken 393 00:23:31,920 --> 00:23:36,959 Speaker 1: some very valuable intellectual property and is also going overseas. 394 00:23:37,400 --> 00:23:40,959 Speaker 1: And as they reviewed her communications, they started to piece together, oh, 395 00:23:41,080 --> 00:23:43,800 Speaker 1: this was about creating a company in China. 396 00:23:44,800 --> 00:23:47,920 Speaker 4: In February of twenty nineteen, chen and Yo was arrested 397 00:23:48,040 --> 00:23:48,720 Speaker 4: by the FBI. 398 00:23:49,359 --> 00:23:51,720 Speaker 1: She was taken in for an interview with the FBI 399 00:23:52,200 --> 00:23:55,520 Speaker 1: in their Grand Rapids, Michigan office. Agreeing to give an 400 00:23:55,560 --> 00:23:58,560 Speaker 1: interview is it's a pretty risky thing, right because anything 401 00:23:58,600 --> 00:24:02,160 Speaker 1: you say that's not true, you could be criminally charged with. 402 00:24:02,640 --> 00:24:07,160 Speaker 1: And Shannon begins with a very adamant denial that she 403 00:24:07,160 --> 00:24:09,280 Speaker 1: she didn't do anything wrong, she didn't share any information, 404 00:24:09,359 --> 00:24:10,960 Speaker 1: she doesn't know why she's there. 405 00:24:12,000 --> 00:24:16,679 Speaker 2: And you obtained the recording of this FBI interview with 406 00:24:16,960 --> 00:24:19,160 Speaker 2: Shannon Yo. Here's part of it. 407 00:24:20,480 --> 00:24:21,560 Speaker 7: How are they going to get into this? 408 00:24:22,440 --> 00:24:24,160 Speaker 6: That's that's the reason. 409 00:24:24,440 --> 00:24:24,920 Speaker 1: Okay. 410 00:24:25,119 --> 00:24:30,200 Speaker 7: I try to bring the bringing them mac let in 411 00:24:30,359 --> 00:24:33,280 Speaker 7: basic help and build a factory. But because they don't 412 00:24:33,320 --> 00:24:36,320 Speaker 7: have as partise, I thought I would be able to 413 00:24:36,440 --> 00:24:40,880 Speaker 7: help revite some consultant, okay, because I do know all 414 00:24:41,000 --> 00:24:45,040 Speaker 7: the not just the secret but in general how to 415 00:24:45,080 --> 00:24:46,480 Speaker 7: build a factory things have. 416 00:24:46,520 --> 00:24:48,080 Speaker 6: You've been working with this stuff. 417 00:24:47,800 --> 00:24:48,840 Speaker 7: For a long time. 418 00:24:49,000 --> 00:24:49,520 Speaker 6: That's trying. 419 00:24:52,520 --> 00:24:56,920 Speaker 7: But I have never had any intention to develop anything 420 00:24:57,520 --> 00:25:00,399 Speaker 7: other than just help them to set to said. 421 00:25:00,440 --> 00:25:03,520 Speaker 3: Jinhong has an intention to develop? Can I going? Yes? 422 00:25:04,160 --> 00:25:08,600 Speaker 7: They have They have to write that in order to 423 00:25:08,880 --> 00:25:13,240 Speaker 7: get bunding for the government. If they say they just 424 00:25:14,200 --> 00:25:17,119 Speaker 7: as a recitable night lie that they're now going to 425 00:25:17,240 --> 00:25:19,840 Speaker 7: get bombing, and so that's the reason. 426 00:25:19,640 --> 00:25:20,840 Speaker 6: They write this way. 427 00:25:21,240 --> 00:25:24,080 Speaker 1: But as the FBI agents kind of lay out this 428 00:25:24,280 --> 00:25:27,800 Speaker 1: evidence that they had collected over the preceding months, you know, 429 00:25:27,920 --> 00:25:30,680 Speaker 1: it just becomes very clear that she wasn't telling the 430 00:25:30,760 --> 00:25:33,879 Speaker 1: truth and that they had the goods on her, and 431 00:25:34,040 --> 00:25:38,080 Speaker 1: that interview winds up proving really pivotal because they catch 432 00:25:38,119 --> 00:25:41,000 Speaker 1: her in kind of lie after lie after lie. She 433 00:25:41,080 --> 00:25:43,640 Speaker 1: didn't deny that she took the information. She just said 434 00:25:43,680 --> 00:25:45,000 Speaker 1: she didn't share it with anybody. 435 00:25:45,240 --> 00:25:50,000 Speaker 7: But I never shared this with anybody, but you took it. 436 00:25:50,600 --> 00:25:53,639 Speaker 5: That's the problem, okay, And that's where we're at right now. Okay, 437 00:25:54,119 --> 00:25:56,760 Speaker 5: their stuff was on your device, Okay, Okay. 438 00:25:57,320 --> 00:26:00,520 Speaker 1: Ultimately that doesn't matter for the charges against her, because 439 00:26:00,600 --> 00:26:04,520 Speaker 1: what the emails and the messages showed was the intent 440 00:26:04,760 --> 00:26:07,320 Speaker 1: to steal and the intent to use this data to 441 00:26:07,480 --> 00:26:08,679 Speaker 1: create this Chinese company. 442 00:26:09,560 --> 00:26:13,439 Speaker 2: Jordan Drake, we're hearing you recount all of these details 443 00:26:13,520 --> 00:26:16,440 Speaker 2: about Shan and Yo and her work life and what 444 00:26:16,560 --> 00:26:18,800 Speaker 2: she was trying to do in China. How do you 445 00:26:18,960 --> 00:26:22,400 Speaker 2: know all of these details that you've reported. 446 00:26:23,640 --> 00:26:26,480 Speaker 1: Most of what we know about this case comes through 447 00:26:27,080 --> 00:26:32,360 Speaker 1: transcripts of Shannanyo's trial and also you know voluminous communications 448 00:26:32,520 --> 00:26:36,360 Speaker 1: records that were submitted as evidence in her trial. These 449 00:26:36,400 --> 00:26:41,159 Speaker 1: are really lengthy we chat, voice message and text message 450 00:26:41,200 --> 00:26:44,119 Speaker 1: exchanges that Shannanio had with her aunt and her Chinese 451 00:26:44,160 --> 00:26:44,880 Speaker 1: business partners. 452 00:26:45,520 --> 00:26:49,200 Speaker 7: The thing is, okay, I do not have any path 453 00:26:49,840 --> 00:26:52,680 Speaker 7: for the for PP in that cold team though. 454 00:26:53,400 --> 00:26:56,239 Speaker 3: No, but you do have you had it on your 455 00:26:56,280 --> 00:26:56,680 Speaker 3: heart drive. 456 00:26:56,800 --> 00:26:59,640 Speaker 5: You will get and put it on your hard drive directly. 457 00:26:59,680 --> 00:27:04,080 Speaker 7: I have you signed the EGE award, that's the patent 458 00:27:04,240 --> 00:27:10,320 Speaker 7: that is public available. There's some messages in there that 459 00:27:10,400 --> 00:27:12,399 Speaker 7: are pretty damned, but I'll do it. 460 00:27:12,640 --> 00:27:16,080 Speaker 5: You did not transfer the trade secrets, is what you're telling. 461 00:27:16,840 --> 00:27:18,879 Speaker 5: But you have the trade secrets that you are not 462 00:27:19,040 --> 00:27:19,680 Speaker 5: supposed to have. 463 00:27:20,400 --> 00:27:21,760 Speaker 7: Okay, that is a problem. 464 00:27:22,200 --> 00:27:22,359 Speaker 3: You know. 465 00:27:22,400 --> 00:27:24,640 Speaker 1: It's hundreds and hundreds of pages of documents that Drake 466 00:27:24,680 --> 00:27:28,760 Speaker 1: and I went through. There's also a two hour interrogation 467 00:27:28,960 --> 00:27:33,040 Speaker 1: video when Shannon Yo is interviewed by the FBI, which 468 00:27:33,040 --> 00:27:34,160 Speaker 1: we've also obtained. 469 00:27:34,760 --> 00:27:38,719 Speaker 3: Joe says, unlike other TTP winners who are loss overseas. 470 00:27:39,240 --> 00:27:40,959 Speaker 3: She is doing well in the United States. 471 00:27:41,560 --> 00:27:43,600 Speaker 1: She is the one taking the rest during the current 472 00:27:43,640 --> 00:27:46,680 Speaker 1: and friendly period between US Chinese relations. 473 00:27:47,119 --> 00:27:50,960 Speaker 7: And she won't give her technology away easily until she 474 00:27:51,080 --> 00:27:51,920 Speaker 7: sees money. 475 00:27:51,800 --> 00:27:53,560 Speaker 3: For ree as a voiceman. 476 00:27:54,119 --> 00:27:59,480 Speaker 7: Let you think about that, well, I d not do it, okay, 477 00:28:00,280 --> 00:28:04,479 Speaker 7: and the ID now received any money from Cardinal worry 478 00:28:05,160 --> 00:28:06,159 Speaker 7: on the is. 479 00:28:08,119 --> 00:28:10,240 Speaker 1: If all you read is the press release about these cases, 480 00:28:10,280 --> 00:28:13,160 Speaker 1: what you'll see is on IP theft case involving China, 481 00:28:13,280 --> 00:28:15,280 Speaker 1: Like there are lots of those. But if you read 482 00:28:15,320 --> 00:28:17,720 Speaker 1: the transcripts and look at the evidence, that's when those 483 00:28:17,760 --> 00:28:21,119 Speaker 1: documents lay out this fuller picture of not just an 484 00:28:21,200 --> 00:28:24,680 Speaker 1: IP theft involved in China, but of multiple layers of 485 00:28:25,400 --> 00:28:27,439 Speaker 1: scamming and fraud and deceit. 486 00:28:28,920 --> 00:28:32,200 Speaker 4: Shannon went on trial in Tennessee in April twenty twenty one. 487 00:28:32,720 --> 00:28:37,200 Speaker 4: She was convicted of wire fraud, possessing and conspiring to 488 00:28:37,400 --> 00:28:41,480 Speaker 4: steal trade secrets, and economic espionage, and she was sentenced 489 00:28:41,480 --> 00:28:44,840 Speaker 4: to fourteen years in federal prison and she's serving it 490 00:28:45,160 --> 00:28:48,479 Speaker 4: in Aliceville in Alabama. I actually spoke with her by 491 00:28:48,600 --> 00:28:52,600 Speaker 4: phone several months ago. I sent her a letter. She 492 00:28:52,800 --> 00:28:56,520 Speaker 4: got right back to me. Actually and we had a 493 00:28:56,640 --> 00:28:59,320 Speaker 4: fifteen minute phone conversation, which is the longest you're allowed 494 00:28:59,360 --> 00:29:03,120 Speaker 4: to have in federal prison. And she argued that she 495 00:29:03,280 --> 00:29:08,400 Speaker 4: was innocent and that basically her case was an example 496 00:29:08,640 --> 00:29:13,080 Speaker 4: of a kind of xenophobic overreach, that basically she was 497 00:29:13,280 --> 00:29:16,960 Speaker 4: prosecuted because she was Chinese. She's a Chinese scientist. The 498 00:29:17,200 --> 00:29:20,480 Speaker 4: prosecution had confused the jury about some of these technologies. 499 00:29:21,240 --> 00:29:24,400 Speaker 5: And we made plans to talk again. 500 00:29:24,960 --> 00:29:27,680 Speaker 4: But the next day, as she mentioned to me, she 501 00:29:27,880 --> 00:29:30,840 Speaker 4: was speaking with her lawyer, and I think her lawyer 502 00:29:30,960 --> 00:29:34,040 Speaker 4: suggested we not have any further conversations because she didn't 503 00:29:34,200 --> 00:29:37,680 Speaker 4: call back. We had an email exchange more recently where 504 00:29:37,760 --> 00:29:40,480 Speaker 4: she made some of the same arguments, but we weren't 505 00:29:40,520 --> 00:29:41,440 Speaker 4: able to speak again. 506 00:29:42,240 --> 00:29:46,400 Speaker 2: And Jordan therey is one more twist to this story. 507 00:29:47,320 --> 00:29:51,120 Speaker 1: Yeah, as we looked into this case, what we found 508 00:29:51,320 --> 00:29:54,400 Speaker 1: was that a central question was what was ever done? 509 00:29:54,560 --> 00:29:55,360 Speaker 3: Did she get paid? 510 00:29:55,800 --> 00:29:59,000 Speaker 1: What was revealed was that as this money just was 511 00:29:59,240 --> 00:30:02,200 Speaker 1: increasingly not hitting her account, she was not getting paid 512 00:30:02,240 --> 00:30:05,800 Speaker 1: in China, she got very suspicious of her partners there. 513 00:30:06,480 --> 00:30:09,880 Speaker 1: She believed that they were withholding on her. She believed 514 00:30:09,880 --> 00:30:13,000 Speaker 1: they were lying to her. In fact, her Chinese partners 515 00:30:13,200 --> 00:30:16,600 Speaker 1: did receive about eight hundred thousand US dollars in kind 516 00:30:16,640 --> 00:30:19,480 Speaker 1: of advance money to build this factory. That was corporate 517 00:30:19,560 --> 00:30:22,200 Speaker 1: money that they received from the government in China, and 518 00:30:22,760 --> 00:30:26,840 Speaker 1: she suspected that she was being scammed as well. And 519 00:30:27,080 --> 00:30:30,480 Speaker 1: ultimately what happened before she was arrested, she became increasing 520 00:30:30,520 --> 00:30:34,400 Speaker 1: a hostile to her Chinese business partners, accusing them of lying, 521 00:30:34,480 --> 00:30:37,160 Speaker 1: accusing them of stealing from her, and eventually they decide 522 00:30:37,200 --> 00:30:40,640 Speaker 1: to just walk away, and Shannon Yo walks away with 523 00:30:40,840 --> 00:30:44,040 Speaker 1: little more than some kind of token payments that she 524 00:30:44,200 --> 00:30:44,560 Speaker 1: was given. 525 00:30:45,080 --> 00:30:48,040 Speaker 4: The context for this is that these grant programs that 526 00:30:48,160 --> 00:30:51,000 Speaker 4: the Chinese government has used to try to jumpstart everything 527 00:30:51,080 --> 00:30:55,440 Speaker 4: from chip production to electric vehicle manufacturing our rife with fraud. 528 00:30:55,560 --> 00:30:57,880 Speaker 5: There are lots of cases of people basically. 529 00:30:57,640 --> 00:31:01,120 Speaker 4: Taking the money and running, which is something that happens 530 00:31:01,120 --> 00:31:03,240 Speaker 4: in the United States as well with grant programs. And 531 00:31:03,400 --> 00:31:05,920 Speaker 4: so there's a very real possibility and some evidence that 532 00:31:06,120 --> 00:31:10,040 Speaker 4: suggests that there never really was a plan to start 533 00:31:10,120 --> 00:31:13,239 Speaker 4: this business, which makes a certain kind of sense. I mean, 534 00:31:13,320 --> 00:31:16,480 Speaker 4: it would have been quite a volatile experience to go 535 00:31:16,520 --> 00:31:18,160 Speaker 4: into business with Shan and Yo, and it would have 536 00:31:18,200 --> 00:31:20,360 Speaker 4: been hard to set up this business and compete in 537 00:31:20,440 --> 00:31:23,120 Speaker 4: this global industry. It might have just been easier to 538 00:31:23,200 --> 00:31:26,160 Speaker 4: take the eight hundred thousand dollars and call it a day. 539 00:31:26,680 --> 00:31:29,400 Speaker 1: And when she doesn't see any money except some token 540 00:31:29,480 --> 00:31:31,760 Speaker 1: amounts that were given to her, you know, she becomes 541 00:31:31,800 --> 00:31:35,560 Speaker 1: deeply suspicious and posits at one point like maybe I'm 542 00:31:35,600 --> 00:31:36,520 Speaker 1: the mark here. 543 00:31:37,120 --> 00:31:39,880 Speaker 4: And the irony in that, of course, is that there 544 00:31:40,000 --> 00:31:43,680 Speaker 4: was another victim in this scam. If there never was 545 00:31:43,720 --> 00:31:46,080 Speaker 4: a plan to do anything with this ip, then basically 546 00:31:46,120 --> 00:31:48,600 Speaker 4: the Chinese government itself was being ripped off, just like 547 00:31:49,240 --> 00:31:51,560 Speaker 4: the companies, and just like potentially Shannon herself. 548 00:31:54,520 --> 00:31:58,080 Speaker 2: Did you try to reach Shanan Yo's and and this 549 00:31:58,280 --> 00:31:59,600 Speaker 2: business partner in China? 550 00:32:00,120 --> 00:32:02,840 Speaker 1: We tried multiple ways to reach En and Yo's aunt 551 00:32:03,280 --> 00:32:06,440 Speaker 1: as well as lu Xiang Chen in China through emails, 552 00:32:06,640 --> 00:32:10,560 Speaker 1: phone calls, faxes, and we weren't able to connect with 553 00:32:10,640 --> 00:32:11,120 Speaker 1: either of them. 554 00:32:12,080 --> 00:32:13,560 Speaker 2: What are we to take away from this? 555 00:32:14,440 --> 00:32:16,480 Speaker 4: What I think this case shows is that if what 556 00:32:16,560 --> 00:32:18,600 Speaker 4: the Chinese government has tried to do is create an 557 00:32:18,640 --> 00:32:22,640 Speaker 4: incentive system for bringing this valuable information back to China, 558 00:32:23,240 --> 00:32:27,120 Speaker 4: it's one that doesn't work perfectly. And I think human beings, 559 00:32:27,640 --> 00:32:31,120 Speaker 4: when you incentivize them to do things, don't always do 560 00:32:31,320 --> 00:32:33,840 Speaker 4: exactly the thing you want them to do. And in 561 00:32:33,960 --> 00:32:37,200 Speaker 4: this case, sometimes what they might do is simply take 562 00:32:37,240 --> 00:32:40,120 Speaker 4: the money you're giving them to do something and just 563 00:32:40,400 --> 00:32:40,880 Speaker 4: run away. 564 00:32:41,400 --> 00:32:43,600 Speaker 1: I mean, I think my takeaway is very similar, which 565 00:32:43,640 --> 00:32:47,280 Speaker 1: is we got a really incredible and unusually detailed view 566 00:32:48,000 --> 00:32:50,880 Speaker 1: into what the negotiations look like between people who are 567 00:32:51,360 --> 00:32:55,520 Speaker 1: stealing intellectual property to take advantage of these Chinese grant programs. 568 00:32:56,040 --> 00:32:59,880 Speaker 1: The way these grant programs are portrayed typically are as 569 00:33:00,000 --> 00:33:04,960 Speaker 1: this kind of monolith, this machine for stealing intellectual property, which, 570 00:33:04,960 --> 00:33:08,120 Speaker 1: according to many national security officials, you know it is. 571 00:33:08,360 --> 00:33:11,520 Speaker 1: And this case shows that those incentives are very very powerful. 572 00:33:12,000 --> 00:33:15,560 Speaker 1: But what this case also shows is that it's equally 573 00:33:15,760 --> 00:33:19,800 Speaker 1: powerful to just not do anything at all if you 574 00:33:19,880 --> 00:33:21,680 Speaker 1: can get your hands on even just a little bit 575 00:33:21,720 --> 00:33:24,840 Speaker 1: of that money. A little bit of that money is 576 00:33:25,080 --> 00:33:28,560 Speaker 1: life changing for many people, So you don't necessarily have 577 00:33:28,760 --> 00:33:32,840 Speaker 1: to create the world beating competitor to the American technology company. 578 00:33:33,240 --> 00:33:34,880 Speaker 1: You might want to just take a little bit of 579 00:33:34,960 --> 00:33:37,000 Speaker 1: that money off the table for yourself. 580 00:33:37,680 --> 00:33:39,240 Speaker 4: Another way to put it is just that if you 581 00:33:39,360 --> 00:33:43,360 Speaker 4: set up a system to incentivize people to do something, 582 00:33:43,760 --> 00:33:45,920 Speaker 4: whatever it is, including steel ip. 583 00:33:46,680 --> 00:33:49,000 Speaker 5: People are going to figure out ways to work that system. 584 00:33:49,840 --> 00:33:52,640 Speaker 2: Drake Jordan, thanks so much for coming. 585 00:33:52,440 --> 00:33:55,760 Speaker 5: On the show. Thanks a lotles, Thank you for interest. 586 00:33:56,880 --> 00:33:58,800 Speaker 2: Thanks for listening to us here at The Big Take. 587 00:33:59,160 --> 00:34:02,200 Speaker 2: It's a daily pod cast from Bloomberg and iHeartRadio. For 588 00:34:02,320 --> 00:34:06,680 Speaker 2: more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, 589 00:34:06,840 --> 00:34:09,360 Speaker 2: or wherever you listen, and we'd love to hear from you. 590 00:34:09,800 --> 00:34:13,960 Speaker 2: Email us questions or comments to Big Take at Bloomberg 591 00:34:14,000 --> 00:34:17,400 Speaker 2: dot net. The supervising producer of The Big Take is 592 00:34:17,600 --> 00:34:22,719 Speaker 2: Vicky Virgalina. Our senior producer is Katherine Fink. Rebecca Shasson 593 00:34:22,920 --> 00:34:27,360 Speaker 2: is our producer. Our associate producer is Sam Gebauer, with 594 00:34:27,560 --> 00:34:33,160 Speaker 2: additional production support from Federica Romanello. Raphael mcili is our engineer. 595 00:34:33,719 --> 00:34:37,640 Speaker 2: Our original music was composed by Leo Sidrin. I'm Weskasova. 596 00:34:37,960 --> 00:34:40,719 Speaker 2: We'll be back on Monday with another Big Take. Have 597 00:34:40,800 --> 00:34:41,480 Speaker 2: a great weekend.