Six Chinese nationals have been charged with conspiring to steal US trade secrets in an alleged plot to obtain bioengineered corn seed from American seed companies and send it to their own company in China.
The case was revealed in a one-count, 21-page indictment unsealed Thursday in Des Moines, Iowa.
According to documents filed in federal court, the Chinese company officials allegedly drove through rural areas of Iowa, Illinois, and Indiana to dig up freshly planted seeds or collect samples of grown corn to obtain specimens of the valuable engineered seed stock.
The seeds represent years of work by American companies and millions of dollars in research and development. One affected company estimated that the loss of an inbred line of seed would wipe out 5 to 8 years of research and cost the company $30 to $40 million.
The Chinese men targeted seeds produced by Monsanto, LG Seeds, and Pioneer Hi-Bred International, a unit of Dupont, according to the indictment.
The investigation apparently began in May 2011 after a seed company field manager noticed an Asian man on his knees in a freshly-planted corn field. A second Asian male was waiting nearby in a car.
What made the encounter especially suspicious is that the field was an unmarked test plot in a remote area of Iowa. Agents suspect the Chinese received inside information from the American seed companies revealing the secret locations of test fields.
When the Asian man was confronted in the field and asked what he was doing, he replied (falsely) that he worked for the University of Iowa and would soon be attending an agricultural conference in the state.
The project manager recorded the license number of the car and federal agents later traced it to a Chinese businessman in South Florida.
What followed was a year and a half of surveillance of the businessman and his contacts from China. The FBI used physical surveillance, placed GPS trackers in rental cars, bugged the cars, and monitored the men’s phone calls.
The Chinese company even bought a 40-acre farm in Monee, Ill., for $600,000. The men rented storage lockers and purchased quantities of mixed corn seed from local seed distributors, apparently hoping to separate the bioengineered seed from the regular seed. Much of the corn seed was repackaged and shipped to China.
During a recorded call, according to court documents, two of the alleged co-conspirators expressed concern about getting caught.
“These are actually very serious offenses,” the first said.
“They could treat us as spies!” the second replied.
“That is what we’ve been doing!” the first said. “What I am trying to say is, as for the charges, there could be several…”
“It’s e-hum, trespassing other people’s private property, that’s one; secondly, theft/larceny; and the third, violation of IP [intellectual property] law. That’s three charges.”
Among those charged is Mo Hailong, a resident of Boca Raton, Fla., who was arrested last week. He is described as the international business director of the Beijing Dabeinong Technology Group Company.
His company is a part of a Chinese conglomerate with a corn seed subsidiary, Beijing Kings Nower Seed S&T Company.
Five other officials, all with Beijing Kings Nower, are named in the indictment.
They include: Li Shaoming, chief executive officer of Kings Nower, and Wang Lei, vice chairman of the company.
The case is US v. Li Shaoming (13CR147).