116 3rd St SE
Cedar Rapids, Iowa 52401
DES MOINES – Federal authorities announced Thursday they believe they have foiled an international industrial espionage conspiracy involving six people who attempted to transport “inbred” seed corn from two U.S. companies and export the potentially valuable research to a Chinese-based company.
Nicholas Klinefeldt, U.S. attorney for Iowa's southern judicial district, and Thomas Metz, special agent in charge of the FBI's Omaha division, said the 2 ½-year probe has netted the arrest of a Chinese national living in Florida but four other alleged co-conspirators reside in China and one in Canada with dual citizenship.
“The goal of individuals participating in this scheme was to obtain the benefit of research and development by U.S. companies without making the same investment themselves,” Metz said. The industrial theft of trade secrets would allow foreign companies to undercut U.S. products on a global basis, he added.
The criminal complaint brought against Mo Hailong, also known as Robert Mo, for conspiracy to steal trade secrets alleges that he and others took valuable inbred or “parent” corn seed from production fields of Dupont Pioneer and Monsanto in Iowa and Illinois, Klinefeldt and Metz told a news conference.
Mo and the other individuals conspired to steal the U.S. seed manufacturing companies' trade secrets and transport them to China for the benefit of their China-based DBN Group conglomerate, they said. The potential loss associated with the alleged industrial theft was pegged at between $30 million and $40 million and five to eight years of research time.
“We're not saying exactly what if anything left the country; we're not saying what if any loss occurred,” Kleinfeldt said. “We're not saying that actually occurred in this case. It's difficult to estimate what the loss would be here.”
Klinefeldt said the FBI probe was initiated in the summer of 2011 by DuPont Pioneer, which advised federal agents of a “suspicious” incident in one of its grower's Iowa test fields near Tama. Monsanto also reported “suspicious activity” in one of its fields and both U.S. companies are cooperating with investigators.
Mo, a Chinese national who became a lawful permanent U.S. resident, will be tried in Iowa on the conspiracy charge that carries a potential penalty of up to 10 years in prison and a fine of up to $5 million as well as deportation, Klinefeldt said. He declined to say whether additional charges could be filed.
Along with being observed with taking inbred seed corn plants, Mo attended a visit by the Chinese vice president to Iowa during the 2012 World Food Prize ceremonies and participated in tours of Dupont Pioneer and Monsanto facilities – using an assumed identity during some of the activities, Klinefeldt said.
According to the criminal complaint, Mo is “ostensibly” employed as the director of international business of the Beijing Dabeinong Technology Group Company, which is part of the DBN Group – believed to be a Chinese conglomerate with a corn seed subsidiary company, Kings Nower Seed.
In addition to Mo and his overseas co-conspirators, the complaint states that the FBI's investigation is focusing on several potential “insiders” at U.S.-based seed companies, but authorities declined to comment further at Thursday's news conference. The insider employees are suspected of conspiring with Mo to provide the locations of test fields being utilized to grow bio-engineered seed and/or providing the underlying gene sequences for bio-engineered seed developed by the victim companies, according to the criminal complaint.
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