FEDERAL prosecutors arrested Chinese natives for conspiring to steal seed samples and trade secrets in two different cases on Dec. 11-12.
One case consists of two scientists thieving and transferring seed from a Kansas research facility. The other involves several individuals who conspired to steal the trade secrets of two of America's leading seed companies — DuPont Pioneer and Monsanto — to benefit China-based seed companies. It is unclear, at this time, if the two cases are related.
U.S. agricultural companies invest millions of dollars annually in seed research to improve plant genetics and develop seed varieties. Protecting this intellectual property is serious business for these companies.
Agricultural scientists Weiqiang Zhang, 47, of Manhattan, Kan., and Wengui Yan, 63, of Stuttgart, Ark., were charged with trying to steal samples of a variety of seeds from a biopharmaceutical company's research facility in Kansas, U.S. Attorney Barry Grissom said.
Yan, who worked for the U.S. Department of Agriculture as a rice geneticist at the Dale Bumpers National Rice Research Center, and Zhang, employed as an agricultural seed breeder identified as "Company A," were charged with one count of conspiracy to steal trade secrets.
According to court documents, Company A has invested approximately $75 million in patented technology used to create a variety of seeds containing recombinant proteins. The company has an extensive intellectual property portfolio of more than 100 issued and pending patents and exclusive licenses to issued patents.
In 2012, Zhang and Yan had traveled to China at the same time to visit a Crops Research Institute. Some of the people they met in China were members of a Chinese delegation that visited the U.S. in 2013. On July 22, Yan picked up the Chinese delegation from a motel in Stuttgart and took them to the Dale Bumpers rice center.
An affidavit in support of the complaint alleges that on Aug. 7, U.S. Customs & Border Protection agents found stolen seeds in the luggage of a group of visitors from China preparing to board a plane to return home.
Similar seed samples were found at Zhang's residence during a Federal Bureau of Investigation (FBI) search in December. Reports were uncovered after a search of both defendants' computers.
Zhang and Yan are charged in a criminal complaint filed in U.S. district court in Kansas City, Kan.
At the hearing Dec. 13, a federal judge ordered Yan, a naturalized U.S. citizen, to remain in custody after prosecutors argued that he might flee the country.
Zhang had a detention hearing set on Tuesday in Kansas City, Kan., where the case is to be prosecuted.
If convicted, Zhang and Yan face a maximum penalty of 10 years in federal prison and a fine of up to $250,000.
A full-scale FBI investigation took place after a series of suspicious activities transpired in various Iowa fields of seed corn.
In May, a grower contracted by DuPont Pioneer to grow one of its inbred corn seed products that's expected to hit the marketplace in the next several years reported that an Asian male along with another male approached him in the test field and asked him what he had planted.
The next day, a Pioneer field manager saw a man kneeling in the same field and confronted him. When the field manager received a phone call, the man and another male fled the scene. Using the obtained license plate number, FBI tracked the rental car to Mo Hailong.
In September 2011, a county sheriff's office responded to a report of an Asian man acting suspiciously in a corn field near Bondurant, Iowa, that was growing seed corn under contract with Monsanto. The sheriff identified the man as Mo and asked him what he was doing in the field. Mo responded that he and the Chinese visitors were looking at crops.
Following the incident, Mo mailed packages from Iowa to his home office and labeled the content as "corn samples."
After tracking Mo's activities, FBI documents reported that he and Wang Lei, who was identified as the driver in the incidents, had met with the vice president of China in February 2012 and continued similar seed collecting activities in various test fields in Illinois that involved a third individual.
After stealing the inbred corn seed, the conspirators attempted to covertly transfer the inbred corn seed to China.
Pioneer and Monsanto are both cooperating with the investigation.
Grain merchandisers are finding it highly suspicious that the timing of China rejecting loads of corn from the U.S. is coinciding with the filing of federal charges in these conspiracy cases.