A Chinese Spy Stole Millions in Corn Seeds from Monsanto

Mo Hailong, has confessed to his role as the ringleader of a group that stole proprietary corn seeds from agro-giants DuPont Pioneer and Monsanto

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Jan 29 2016, 8:00pm

Photo via Flickr user Muffet

In a case of agricultural espionage that brought Chinese spies to the heartland of Iowan cornfields, a Chinese-born US citizen, Mo Hailong, has confessed to his role as the ringleader of a group that stole proprietary corn seeds from agro-giants DuPont Pioneer and Monsanto.

Mo was the Director of International Business—and the brother-in-law of the founder of—Dabeinong Technology (DBN) Group, a Beijing-based agricultural tech firm. The corn seeds were the proprietary intellectual property, protected by trade secret law, of the aforementioned American Big Corn companies. The stolen IP was valued at $30 million to $40 million.

Mo was arrested back in 2013 following a two-year investigation that was triggered when a security guard for DuPont noticed him crawling around an experimental research field in Iowa. Mo got away initially, but his identity was revealed through a search of rental car companies. Four months later, someone called 911 when Mo was seen examining an unmarked Monsanto GM-cornfield in another part of the state.

That led to a years-long investigation, involving FBI wiretaps and video surveillance. The end was in sight when, in 2012, several of Mo's co-conspirators were found by US customs to be attempting to transport hundreds of cryptically numbered manila envelopes containing some of the valuable seeds—all hidden among large boxes of microwaveable popcorn and wrapped in napkins from a Subway sandwich joint.

The plea agreement that Mo copped this week will reduce his prison sentence from up to ten years to up to five years. It will also give prosecutors access to farms in Iowa and Illinois that Mo had used to reverse-engineer the stolen seeds. Mo also understands, the plea bargain says, that he may very well be deported after serving his prison term, even though his children are American citizens.

Mo's lawyer, Mark Weinhardt, said in a statement, "[Mo and] his family are relieved that they can avoid the strain of a long and complex trial. This is a complicated case with many grey areas, legally and factually, but today... Mo takes complete responsibility for his unlawful conduct in this case."

Mo's sister, Yun, was initially arrested with him, but charges against her were dropped because the prosecutors felt they didn't have enough evidence. Five of his other accomplices actually managed to return to China; they won't be charged under US law because American authorities are unlikely to get their hands on them. China and the US do not have an extradition treaty.

China is eager to grow in the biotech industry. Ironically, the country does not allow the cultivation of GMO plant species in China. However, a study published by Greenpeace showed that a whopping 93 percent of corn samples in China's heartland contained GMOs, so farmers must be getting around the rules somehow.

But Big Corn is happy with the Mo conviction. Just to give you an idea of the role Big Corn plays in this country, the US spent roughly $81 billion subsidizing the corn industry from 1995 to 2012. In contrast, subsidies towards apples and vegetables only accounted for $637 million. That's a massive discrepancy in spending even if you were to ignore the fact that 75 percent of said $81 billion went to only 3.8 percent of US farmers.

Monsanto just so happens to be not only America's largest seed producer, but also the entire world's. Back in 2012, they had a $42 billion market cap, build atop tightly guarded secrets leading to extremely high-yielding seeds.

So, if you thought espionage just involved military secrets, you'd be wrong. Corn can be a pretty valuable commodity, worthy of Bond-esque machinations, and the drama can take place in the unlikeliest of locations—the cornfields of Iowa.