Chi­nese spies are on a quest: to steal corn

Eco­nomic es­pi­onage proves to be a ris­ing prob­lem in U.S. as China seeks bet­ter crops


DES MOINES, IOWA— It was a chilly spring day when an Iowa farmer spot­ted some­thing odd in his freshly planted corn­field: a short, bald Asian man on his knees, dig­ging up seeds.

Not just any seeds — spe­cial in­bred seeds, the prod­uct of years of se­cret re­search and mil­lions of dol­lars in cor­po­rate in­vest­ment, so con­fi­den­tial that not even the farmer knew ex­actly what he was grow­ing.

The Iowa res­i­dent ap­proached the tres­passer, who grew flush and ner­vous, stam­mer­ing some­thing about be­ing from a lo­cal univer­sity. When the farmer di­verted his at­ten­tion briefly to take a phone call, the stranger bolted to a wait­ing car and sped away.

That cu­ri­ous en­counter even­tu­ally led to an ex­haus­tive five-year fed­eral in­ves­ti­ga­tion and pros­e­cu­tion into one of the most brazen ex­am­ples of Chi­nese eco­nomic es­pi­onage against the U.S., a crime that an­nu­ally costs Amer­i­can com­pa­nies at least $150 bil­lion.

The FBI pulled out all the stops to catch the spies. Agents ob­tained sur­veil­lance war­rants from the na­tion’s se­cret in­tel­li­gence court, planted GPS-track­ing de­vices on cars, trailed op­er­a­tives from air­planes and bugged their phones.

The probe cul­mi­nated in Oc­to­ber with a three-year prison sen­tence for Mo Hai­long, 47, a Chi­nese ci­ti­zen and U.S. le­gal res­i­dent who works for a Chi­nese con­glom­er­ate.

Fed­eral of­fi­cials say the pros­e­cu­tion of Mo, also known as Robert Mo, sent a mes­sage to China and oth­ers that eco­nomic es­pi­onage will not go un­pun­ished.

But out­side ex­perts say the case also re­vealed the dif­fi­culty and some­times fu­til­ity of bring­ing jus­tice to those re­spon­si­ble for feed­ing China’s rav­en­ous ap­petite for U.S. in­tel­lec­tual prop­erty.

Mo, who is be­ing treated for a rare form of can­cer, re­ceived a sen­tence that was even more le­nient than the max­i­mum five years laid out in his plea deal. Five oth­ers in­dicted in the plot re­main free in China, out of the reach of U.S. law en­force­ment. And though the FBI sus­pected the Chi­nese govern­ment was in­volved in the thefts, it was never able to prove the link.

Worse, even though the scheme was ex­posed, Chi­nese com­pa­nies al­most cer­tainly got their hands on some of the lu­cra­tive seeds. Five years be­fore his ar­rest, court records show, Mo was be­ing praised by his su­pe­ri­ors for the qual­ity of seeds he al­ready had stolen.

“You have to have some kind of stick to get them to think twice,” said Me­lanie Reid, pro­fes­sor at Lin­coln Me­mo­rial Univer­sity’s Dun­can School of Law.

“Be­cause these in­ves­ti­ga­tions can be quite com­pli­cated and many of the play­ers are in other coun­tries and pro­tected from U.S. pros­e­cu­tion, it is un­clear whether these types of cases are mak­ing a dent. Theft of trade se­crets is not only pro­moted by Chi­nese govern­ment poli­cies and state-backed com­pa­nies, but it also re­flects their so­ci­etal at­ti­tude to­ward in­tel­lec­tual prop­erty. They sim­ply don’t see steal­ing U.S. trade se­crets as a crime.”

Some U.S. law en­force­ment of­fi­cials echoed those ob­ser­va­tions, say­ing there is no clear ev­i­dence on the ground that such prose­cu­tions have slowed China’s quest for U.S. se­crets.

But they say do­ing noth­ing isn’t an op­tion ei­ther, and they note that ag- gres­sive prose­cu­tions against other forms of es­pi­onage by Chi­nese, such as cy­ber hack­ing, ap­pear to have de­terred such acts.

The Mo case high­lighted the chal­lenges of such prose­cu­tions, which of­ten span the globe and re­quire the as­sis­tance of sci­en­tists, an­a­lysts, lin­guists and cor­po­rate ex­ec­u­tives who can be wary about co-op­er­at­ing for fear of dis­clos­ing their trade se­crets.

Prov­ing the Chi­nese govern­ment was in­volved in the theft was seen as crit­i­cal to de­ter­ring fu­ture at­tempts, but not sur­pris­ingly, China re­fused to co-op­er­ate or turn over in­for­ma­tion and sus­pects for trial.

The in­ter­est in Iowa seed was plain: China’s de­mand for corn is ex­pected to out­strip sup­ply in the next decade.

To close that gap, China would ben­e­fit from plant­ing bet­ter corn seed — such as the kind be­ing pro­duced by Pioneer and Mon­santo.

Cre­at­ing ro­bust seeds re­quires the breed­ing of two pure “in­bred” lines of seed to craft a “hy­brid” that is later sold to the pub­lic.

De­vel­op­ing a sin­gle in­bred can cost as much as $30 mil­lion to $40 mil­lion in lab­o­ra­tory test­ing, field work and trial and er­ror; com­pa­nies eval­u­ate scores of in­breds to de­velop a sin­gle hy­brid.

To bring crim­i­nal charges, the FBI first had to ge­net­i­cally test the seeds to prove they were the prod­uct of U.S. trade se­crets.

It took the bureau nine months to iron out the agree­ments with Pioneer and Mon­santo to con­duct the tests at an in­de­pen­dent lab.

“Nei­ther Pioneer nor Mon­santo un­der­stand­ably wanted the other to have their se­crets,” let alone a Chi­nese com­pany, FBI spe­cial agent Mark Bet­ten said.

The tests re­vealed that many of the seeds were in­breds be­long­ing to both com­pa­nies.

In De­cem­ber 2013, agents ar­rested Mo at his home in Boca Ra­ton, Fla. By then, the other de­fen­dants were out­side the U.S.

Calls to the Chi­nese em­bassy in Wash­ing­ton were not re­turned, nor were mes­sages and emails left with DBN and Kings Nower.

Pioneer de­clined to com­ment on the case. Mon­santo said in a state­ment that it fully co­op­er­ated with the FBI and is pleased “this mat­ter has been con­cluded.”


China’s de­mand for corn is ex­pected to out­strip sup­ply in the next decade, and would ben­e­fit from U.S. seeds.


Mo Hai­long, right, and his at­tor­ney, Mark Wein­hardt, af­ter the Florida res­i­dent was sen­tenced to three years in prison for steal­ing trade se­crets.

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