Corn caper cost firms $500 million, U.S. says

DES MOINES, Iowa — The value of the patented seed allegedly stolen from U.S. seed corn companies likely exceeds $500 million, federal prosecutors said Thursday, higher than previous estimates.

The new estimate surfaced in a custody hearing Thursday for Mo Yun, a Chinese woman charged in Iowa as part of what prosecutors say was a conspiracy involving seven employees of a Chinese agriculture biotechnology company to steal trade secrets.

Additional information gathered as part of the investigation into theft of seed corn from fields in Iowa and Illinois revealed that some was among Pioneer’s highest yielding and most successfully developed seed, FBI Special Agent Mark Betten testified at the hearing in federal court in Des Moines. Additional seed also is alleged to have been stolen from Monsanto.

Seed developers in the highly competitive industry spend years and millions of dollars on research developing improved corn genetics that increase production and toughen resistance to drought and insects. The government alleges in indictments that the group of Chinese nationals working for DBN and a subsidiary was shipping the seed to China to be replicated, eliminating the cost of research and development.

Betten said spreadsheets and digital data on computers and storage devices taken in December 2013 from Mo Hailong, a man arrested in Boca Raton, Florida, list product identification numbers of stolen seed. Of the six men originally indicted, only Mo Hailong is in custody. The government said the other five remain fugitives.

Mo Hailong, who is under house arrest in Des Moines, is the brother of Mo Yun. She was arrested July 1 in California while on vacation with her two young children for a Disneyland vacation. She was taken into custody at Los Angeles International Airport; her children flew home alone.

At Thursday’s hearing, her attorney, Terry Bird, pushed for her release on bond with a GPS ankle bracelet. He asked Judge Robert Pratt to allow her to travel to California where her attorneys are located or to New York and Florida, where she has relatives. He also asked the judge to permit her to fly back to China in the custody of private security guards to see her children who “need their mother.”

Bird said the government’s allegations are based on misinterpreted instant messages between Mo and her brother. He claimed Mo Yun is innocent.

“This is weak stuff. A paucity of evidence as it is related to my client,” he said. Mo sat quietly in court next to a Mandarin Chinese interpreter who translated for her.

Assistant U.S. Attorney Jason Griess argued that the charges carry a prison sentence of up to 10 years, and that Mo may want to flee the country to avoid prosecution.

“While perhaps not extensive, evidence of Mo Yun’s involvement in the conspiracy is far from weak. In spite of the fact they were made early in the conspiracy, these communications clearly show Mo Yun’s knowledge of, and active participation in, key aspects of the conspiracy to steal trade secrets,” he wrote in court documents.

Griess also pointed out that China has no extradition treaty with the United States, so if she’s allowed to return home she’ll never come back for trial. Bird said she has a strong incentive to show up for trial and clear her name.

Pratt said he would issue a ruling soon. A trial date has been set for Dec. 1.

Bird and Mo, who is married to Shao Genhuo, founder and chief operating officer of DBN whose net worth is estimated at $1.3 billion, declined to comment.

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