Jim Dey: Spy case stretches from China to Midwest

Jim Dey: Spy case stretches from China to Midwest

The conspirators were getting nervous.

"These are actually very serious offenses," said one.

"They could treat us like spies," a companion replied.

But they dutifully followed orders and carried on, driving across rural areas of Illinois and Iowa as they searched for buried treasure in farmers' fields.

On Aug. 31, 2012, they scoured farm fields in Mansfield and Arrowsmith. The next day they were in Earlville, and the next it was Harmon and Manito. On and on it went — Foosland, Dewey, Rantoul, Fairmount.

Once the illegal goods were gathered and stored, the conspirators sought to cover their tracks by cleaning their rental cars.

"This is not optional. ... I did not want to leave any traceable marks or clues in the car," the ringleader stated.

"Right, not a single kernel of corn was left behind," a lieutenant enthusiastically agreed.

Corn?

Yes, but not just any corn — bio-engineered seed corn. It's worth many millions of dollars and takes American companies like Pioneer Hi-Bred, Monsanto and LG Seeds years of careful research to develop.

That's why, according to a recent federal grand jury indictment returned in Des Moines, Iowa, industrial spies from China have been making their way to the Midwest to steal hybrid seed cornand then shipping it back home.

The grand jury indictment charging conspiracy to steal trade secrets names six Chinese nationals — one the chief operating officer of the Beijing Kings Nower Seed S&T Co. But the indictment also indicates that the investigation is not complete — that still-unidentified American company insiders were tipping off the industrial spies as to where they could find the seed companies' carefully concealed test fields.

The indictment, returned in December, wrapped up a nearly two-year investigation that began with an incident in May 2011 when two Chinese men approached an Iowa farmer to ask what he was growing in his field.

"Seed corn," the farmer replied.

The visitors explained they were in Iowa to attend an agricultural conference in Ames and were curious. But the next day the pair was spotted by a Pioneer field manager in the same farmer's field. One man — identified as Robert Mo — was on his knees while his companion remained in the car.

Mo told the field manager he worked for the University of Iowa, but the moment the Pioneer employee was distracted by a phone call, Mo and his companion fled.

"(They drove) through the ditch in order to leave quickly," said FBI Special Agent Mark Betten in an affidavit filed with the court.

The Pioneer employee got their license plate, which was quickly identified as a car rented by Mo.

A cursory investigation revealed there was no agriculture conference in Ames, that Mo was not an employee of the University of Iowa and that skullduggery was afoot.

Particularly telling was that in September 2011, Mo mailed 15 packages weighing 341 pounds and identified as "corn samples" from a UPS store in Iowa to his home in Boca Raton, Fla.

"The FBI does not know what Mo did with these samples after receiving them at his residence," Betten said.

Court documents outline a fascinating story of cat-and-mouse between FBI agents tracking industrial spies throughout the heartland. The indictment alleges the conspirators obtained seed corn through various means — digging it by hand out of farm fields, stealing ears of corn, even buying bags of seeds from dealers — and then hid it away in storage shelters in Adel, Iowa, and New Lenox, Ill.

Mo, acting on behalf of King Nower Seed, allegedly bought a plot of ground for $600,000 — a 40-acre farm in Monee located roughly 40 miles from Chicago — to use to test some seed corn and store the rest before shipping it back to China. The government is seeking the forfeiture of the Monee farm.

The conspirators were all too aware that they could draw law enforcement attention. As FBI agents tailed them, they engaged in countersurveillance tactics — driving slowly for long periods and then speeding up and making sudden turns.

One of the conspirators — Mo — took time out from his activities to attend a dinner hosted by the governor of Iowa for the vice president of China, although he did so under an assumed name.

Mo is being held in federal custody in Florida until he's transferred to Iowa.

Nower Seed boss Li Shaoming and three company employees — Wang Lei, Ye Jian and Lin Yong — live in China. The United States does not have an extradition agreement with that country.

A sixth defendant — Wang Hongwei — is a citizen of both Canada and China. The U.S. does have an extradition agreement with Canada, but Hongwei is not in custody.

Mo's lawyer said his client will plead not guilty and that his client "expects to fight this to the end."

The development of hybrid seeds is big business, but one costly to pursue. Companies work hard to develop seeds resistant to disease, drought and pests, and they protect their research with high-tech security and strict secrecy. Contract growers aren't told what they're planting, and test grounds are often located off the beaten path.

But people are easily tempted. The FBI believes company insiders tipped off the industrial spies about test field locations.

One incident described by the FBI showed how easy it can be for an industrial spy to operate.

On April 30, 2012, Mo visited a Pioneer Seed dealer in Dallas Center, Iowa, and purchased six bags of Pioneer Hi-Bred seed corn for $1,533.

The owner told the FBI that Mo "purchased seed in a similar manner the last two years," paid in cash and was "evasive" when asked what he does with the seeds. The owner said Mo usually asks for Pioneer's latest product but on that date came in with a specific list.

The owner acknowledged to the FBI that Pioneer would not be pleased that he sold the seeds to Mo because the dealer is authorized to sell only to farmers who have a purchase agreement with the company and agree to abide by its conditions.

"The owner explained Mo has never signed such an agreement and (that he) should not sell it to him," the FBI's Betten said.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or at 351-5369.

 

Fast facts: Some things you ought to know about seed corn:

1. Inbred corn lines

Plant breeders start by pollinating a corn plant with its own pollen (in an open pollinated field, corn plants would typically receive pollen from other plants). After successive generations, the resulting corn is a pure-bred strain.

2. Hybrid corn

Plant scientists cross-breed one inbred corn plant with another, with the goal of developing a hybrid that has a greater yield and is drought- and pest-resistant.

3. Big business

Starting in the 1930s, farmers found they got greater yields using hybridized seed corn than using open-pollinated seed. Hybridization also means that farmers rely on seed companies year after year for seed corn.

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