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Tech Heist: Seeds of Deceit

January 25, 2014
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Unassuming from the road, this farmstead served as the headquarters for a ring of international thieves bent on embezzling U.S. seed.   

The FBI thwarts a ring of Chinese national thieves.

Crouched on his hands and knees under an Iowa sky, Mo Hailong quickly dug in the rows of freshly planted seed corn. Just the day before, May 2, 2011, he and coworker Wang Lei, vice chairman of Kings Nower Seed of China, stopped at this same field near Tama, Iowa. The farmer told them he was planting seed corn.

With each shovel, Hailong found pay dirt: DuPont Pioneer’s latest parent gene­tics, the building blocks for the next generation of high-yielding hybrids. The men hoped these seeds would help their own company keep up with global competition.

Mo’s head snapped up as a truck approached, dust billowing behind. A DuPont Pioneer field manager pulled over and hopped out as Mo rose from his knees. The field manager questioned what Mo was doing, to which he gave a well-rehearsed response, "We’re on our way to a research conference." It’s an answer he had used before, but this time, with dirt under his nails and seeds in his pocket, he knew its effectiveness was compromised. Using the difference in culture and native languages, Mo tried to mask further suspicion. Then, the field manager’s phone rang. As he turned away, Mo hurried to Lei, waiting in the rental car. He jumped in and Lei swung the car around on the narrow dirt road. The field manager looked up from his phone to see the car and two Chinese nationals racing away.

That chance encounter with two Chinese nationals sneaking around rural Iowa raised the suspicion of DuPont Pioneer security officials. The FBI investigation that ignited ultimately busted an elaborate seed heist in America’s heartland.

The intense investigation culminated Dec. 12, 2013, when the U.S. Attorney for the Southern District of Iowa charged six Chinese nationals with conspiracy to steal trade secrets from and commit overt acts against DuPont Pioneer, Monsanto Company and LG Seeds. As the nearly 50 pages of court documents spell out, this stealth operation was more than an uncoordinated smash and grab. Page after page unfolds in great detail, much like a spy novel, demonstrating the lengths these men took to steal U.S. seed technology.

The defendants are alleged to have conspired to steal inbred corn seed from the three companies and transfer the seed to China. The estimated value of an inbred line of seed is five to eight years of research and a minimum of $30 to $40 million.

Following the initial confrontations in May 2011, the DuPont Pioneer field manager alerted company security, who then tipped off the FBI during a routine visit on June 30. That field near Tama was planted with a variety of proprietary inbred or parent test seed. Because of its value to the company’s future, it’s considered a trade secret, so the field is unmarked. Just how Mo and his co-conspirators targeted this field is still under investigation.

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Taken May 14, 2012, this Google Earth image captured activity at the Monee, Ill., farm that the espionage team used as their headquarters.

Four months later, a Polk County Sheriff’s deputy responded to a farm field near Bondurant, Iowa, following a report of suspicious activity by several Asian males. The officer identified Mo, Wang Lei and Li Shaoming. Mo told the deputy the men were driving across the Midwest looking at crops. He acted surprised that authorities would stop and question them. This field, planted in Monsanto seed, was also growing parent or inbred varieties. Again, it was unmarked, and only the company knew its exact contents.

On Sept. 27, Mo mailed 15 packages from a UPS store in West Des Moines, Iowa, to his home in Boca Raton, Fla. The contents, labeled as corn samples, weighed nearly 350 lb. The FBI does not know what Mo did with these samples after receiving them at his residence.

At that point, investigators were on high alert and began to monitor Mo and his counterparts in earnest on suspicion of property theft. In February 2012, Mo and Lei joined a group participating in the visit of then vice president and current president of China, Xi Jinping, to Iowa. Investigators say Lei boarded a bus at Chicago O’Hare International Airport, which took him and the group of Asians, to Urbandale, Iowa.

The next day, Mo was spotted by security at DuPont Pioneer’s headquarters on a tour with the group. However, he registered under the false identity of Hougang Wu, chairman of Dalian Zhangzidao Fishery Group. He was also spotted later that day on a tour of a Monsanto research facility in Ankeny, Iowa. That night, Mo attended a dinner hosted by the Iowa governor in honor of China’s leader.

On Feb. 16, after attending an ag symposium at the World Food Prize building in Des Moines, Mo joined Lei and met with a Chinese seed executive and former DuPont Pioneer employee at a sports bar near their Urbandale hotel. The FBI says that man’s wife is currently a corn geneticist researcher with DuPont Pioneer. That evening after attending another event, Mo returned to the hotel.

In April, the FBI followed Mo from his home in Florida to Chicago, where he rented a car. He spent the latter part of April driving through rural Illinois and northern Indiana. On April 26, Mo started spending time at a farm near Monee, Ill. It turns out that he bought the 40-acre parcel in March on behalf of Kings Nower North America for approximately $600,000.

Two days later, the FBI followed Mo to Adel, Iowa. During the trip, agents say he drove slowly at times, followed by short bursts of high speed. Once in Adel, he made U-turns and ducked into parking lots off the main road.

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FEATURED IN: Farm Journal - February 2014



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