Chinese Espionage: U.S. Expelled Chinese Officials After Breach of Military Base

Chinese Embassy officials trespassed onto a Virginia base that is home to Special Operations forces. 
By Edward Wong and Julian E. Barnes

Spy nest: The Chinese Embassy in Washington. The expulsions show the American government is now taking a harder line against espionage by China.

WASHINGTON — The American government secretly expelled two Chinese Embassy officials this fall after they drove on to a sensitive military base in Virginia, according to people with knowledge of the episode. 

The expulsions are the first of Chinese diplomats suspected of espionage in more than 30 years.American officials believe at least one of the Chinese officials was an intelligence officer operating under diplomatic cover, said six people with knowledge of the expulsions. 

The group, which included the officials’ wives, evaded military personnel pursuing them and stopped only after fire trucks blocked their path.
The episode in September, which neither Washington nor Beijing made public, has intensified concerns in the Trump administration that China is expanding its spying efforts in the United States.

American intelligence officials say China poses a greater espionage threat than any other country.In recent months, Chinese officials with diplomatic passports have become bolder about showing up unannounced at research or government facilities, American officials said, with the infiltration of the military base only the most remarkable instance.
The expulsions, apparently the first since the United States forced out two Chinese Embassy employees with diplomatic cover in 1987, show the American government is now taking a harder line against espionage by China, officials said.

On Oct. 16, weeks after the intrusion at the base, the State Department announced sharp restrictions on the activities of Chinese diplomats, requiring them to provide notice before meeting with local or state officials or visiting educational and research institutions.
At the time, a senior State Department official told reporters that the rule, which applied to all Chinese Missions in the United States and its territories, was a response to Chinese regulations imposed years ago requiring American diplomats to seek permission to travel outside their host cities or to visit certain institutions.
Two American officials said last week that those restrictions had been under consideration for a while because of growing calls in the American government for reciprocity, but episodes like the one at the base accelerated the rollout.
The base intrusion took place in late September on a sensitive installation near Norfolk, Va. 

The base includes Special Operations forces, said the people with knowledge of the incident. 

Several bases in the area have such units, including one with the headquarters of the Navy’s elite SEAL Team Six.

The Elizabeth River in Norfolk, Va. The military base intrusion took place in late September on an installation considered especially sensitive in the area.

The Chinese officials and their wives drove up to a checkpoint for entry to the base, said people briefed on the episode. 

A guard, realizing that they did not have permission to enter, told them to go through the gate, turn around and exit the base, which is common procedure in such situations.
But the Chinese officials instead continued on to the base, according to those familiar with the incident. 

After the fire trucks blocked them, the Chinese officials indicated that they had not understood the guard’s English instructions, and had simply gotten lost, according to people briefed on the matter.
American officials said they were skeptical that the intruders made an innocent error and dismissed the idea that their English was insufficient to understand the initial order to leave.
It is not clear what they were trying to do on the base, but some American officials said they believed it was to test the security at the installation, according to a person briefed on the matter. 

Had the Chinese officials made it onto the base without being stopped, the embassy could have dispatched a more senior intelligence officer to enter the base.
The Chinese Foreign Ministry and Chinese Embassy in Washington did not reply to requests for comment about the episode. 

Two associates of Chinese Embassy officials said they were told that the expelled officials were on a sightseeing tour when they accidentally drove onto the base.
The State Department, which is responsible for relations with the Chinese Embassy and its diplomats, and the F.B.I., which oversees counterintelligence in the United States, declined to comment.
Chinese Embassy officials complained to State Department officials about the expulsions and asked in a meeting whether the agency was retaliating for an official Chinese propaganda campaign in August against an American diplomat, Julie Eadeh. 

At the time, state-run news organizations accused Ms. Eadeh, a political counselor in Hong Kong, of being a “black hand” behind the territory’s pro-democracy protests, and personal details about her were posted online. 

A State Department spokeswoman called China a “thuggish regime.”
So far, China has not retaliated by expelling American diplomats or intelligence officers from the embassy in Beijing, perhaps a sign that Chinese officials understand their colleagues overstepped by trying to enter the base. 

One person who was briefed on reactions in the Chinese Embassy in Washington said he was told employees there were surprised that their colleagues had tried something so brazen.

The American Consulate in Hong Kong in September.

In 2016, Chinese officers in Chengdu abducted an American Consulate official they believed to be a C.I.A. officer, interrogated him and forced him to make a confession. 

Colleagues retrieved him the next day and evacuated him from the country. 

American officials threatened to expel suspected Chinese agents in the United States, but apparently did not do so.
China is detaining a Canadian diplomat on leave, Michael Kovrig, on espionage charges, though American officials say he is being held hostage because Canada arrested a prominent Chinese technology company executive at the request of American officials seeking her prosecution in a sanctions evasion case.
For decades, counterintelligence officials have tried to pinpoint embassy or consulate employees with diplomatic cover who are spies and assign officers to follow some of them. 

Now there is growing urgency to do that by both Washington and Beijing.
Evan S. Medeiros, a senior Asia director at the National Security Council under Barack Obama, said he was unaware of any expulsions of Chinese diplomats or spies with diplomatic cover during Obama’s time in office.
If it is rare for the Americans to expel Chinese spies or other embassy employees who have diplomatic cover, Medeiros said, “it’s probably because for much of the first 40 years, Chinese intelligence was not very aggressive.”
“But that changed about 10 years ago,” he added. 

“Chinese intelligence became more sophisticated and more aggressive, both in human and electronic forms.”
For instance, Chinese intelligence officers use LinkedIn to recruit current or former employees of foreign governments.
This year, a Chinese student was sentenced to a year in prison for photographing an American defense intelligence installation near Key West, Fla., in September 2018. 

The student, Zhao Qianli, walked to where the fence circling the base ended at the ocean, then stepped around the fence and onto the beach. 

From there, he walked onto the base and took photographs, including of an area with satellite dishes and antennae.
When he was arrested, Zhao spoke in broken English and, like the officials stopped on the Virginia base, claimed he was lost.
Chinese have been caught not just wandering on to government installations but also improperly entering university laboratories and even crossing farmland to pilfer specially bred seeds.
In 2016, a Chines, Mo Hailong, pleaded guilty to trying to steal corn seeds from American agribusiness firms and give them to a Chinese company. 

Before he was caught, Mo successfully stole seeds developed by the American companies and sent them back to China, according to court records. 

He was sentenced to three years in prison.
The F.B.I. and the National Institutes of Health are trying to root out Chinese scientists in the United States who are stealing biomedical research for China. 

The F.B.I. has also warned research institutions about risks posed by Chinese students and scholars.

Last month, Jerry Chun Shing Lee, a former C.I.A. officer, was sentenced to 19 years in prison, one of several former American intelligence officials sentenced this year for spying for Beijing.
His work with Chinese intelligence coincided with the demolition of the C.I.A.’s network of informants in China — one of the biggest counterintelligence coups against the United States in decades. 

From 2010 to 2012, Chinese officers killed at least a dozen informants and imprisoned others. 

One man and his pregnant wife were shot in 2011 in a ministry’s courtyard, and the execution was shown on closed-circuit television, according to a new book on Chinese espionage.
Many in the C.I.A. feared China had a mole in the agency, and some officers suspected Lee, though prosecutors did not tie him to the network’s collapse.
For three decades, China did have a mole in the C.I.A., Larry Wu-Tai Chin, considered among the most successful enemy agents to have penetrated the United States. 

He was arrested in 1985 and convicted the next year, then suffocated himself with a trash bag in his jail cell.

Nation of Spies

Economic espionage: The saga of the Chinese spies and the stolen corn seeds
By Del Quentin Wilber

Chinese happy spy: Mo Hailong, left, prepares to enter court.

Chinese spy ring: Li Shaoming, Wang Lei, Wang Hongwei, Ye Jian and Lin Yong.

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 this month 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 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 aggressive 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 cooperating 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 cooperate or turn over information and suspects for trial.
According to a review of court filings and interviews with U.S. law enforcement and FBI officials, some of whom spoke about the case for the first time, the investigation got a kick-start because the farmer jotted down the license plate number of the rental car.
He reported the incident to DuPont Pioneer, the global agriculture giant that owned the seeds. 

The Johnston, Iowa-based company used the rental car license number to identify Mo, and then passed along the information to FBI Special Agent Mark Betten of the bureau’s Des Moines office.
Betten soon learned that a local sheriff’s deputy had spotted Mo and two other men acting suspiciously near a second Iowa seed-testing field, this one used by Monsanto, an agricultural corporation headquartered near St. Louis.
Mo’s appearance in two such testing fields operated by separate companies — more than 85 miles apart — sparked Betten’s curiosity. 

The agent did some sleuthing and discovered that Mo had recently mailed to his home in Florida 15 heavy packages containing “corn samples.”
Betten also learned that Mo was the U.S.-based director of international business for Beijing Dabeinong Technology Group, also known as DBN, a Chinese conglomerate that sells seeds through a subsidiary called Beijing Kings Nower Seed Science & Technology Co. 

Both are considered to have close ties to the Chinese government. 

Mo’s sister was married to DBN’s billionaire chairman.
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 — like 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.
Though he worried his supervisors would balk at an investigation involving something seemingly as mundane as corn seeds, Betten ramped up the probe. 

By 2012, agents were trailing Mo as he sped across Iowa, Indiana and Illinois. 

Following the spy was not easy because he sometimes engaged in counter-surveillance maneuvers, such as driving slowly, then fast, making U-turns and watching traffic for possible tails.
“You have to be careful trailing someone in farm country,” said Betten, a Nebraska native who speaks in a clipped Midwestern accent. 

“Cars kick up a lot of dust and can be seen from a long way off.”
Betten and other agents watched as Mo visited agriculture supply stores and purchased Pioneer and Monsanto seed, stashing it in a rented storage locker. 

The store clerks never should have sold the seeds to Mo and his colleagues because they had not signed required contracts with the companies.
A few weeks later, Mo and two Kings Nower employees wheeled five large boxes destined for Hong Kong into a FedEx store in suburban Chicago.
After the men left, agents swept in. 

They discovered 42 bags of hybrid seeds in the boxes; each bag was marked with its own code, presumably to help identify the contraband. 

The FBI replaced the seeds with others already commercially available in China and shipped them on their way.
Stepping up their surveillance, the agents listened to secretly recorded conversations of two Kings Nower employees — Lin Yong and Ye Jian, both Chinese citizens who live in China — discussing their crimes as they crisscrossed farm country in search of seeds.
“These are actually very serious offenses,” Lin told Ye, according to Justice Department transcripts of secretly recorded conversations.
“They could treat us as spies,” Ye said.
“That is what we’ve been doing,” Lin replied.
After six weeks of seed gathering, Ye and Kings Nower’s chief operating officer, Li Shaoming, tried to spirit their haul to China. 

As they were departing Chicago’s O’Hare International Airport on Sept. 30, 2012, customs officers searched the men and their luggage and found thousands of stolen seeds, much of it hidden in resealed boxes of microwave popcorn.
Meanwhile, customs agents stopped another of Mo’s associates trying to cross the border into Canada and found corn seed hidden in his luggage too.
The men were allowed to leave the country, but the seeds were seized.
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, 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.”
Mo pleaded guilty to conspiring to steal trade secrets. 

Subdued and apologetic at his Oct. 5 sentencing, Mo removed his wire-rimmed glasses to wipe away tears, saying that he had “destroyed everything I had wanted” in life.
Looking down at Mo, U.S. District Judge Stephanie Rose said she felt bad for the man’s plight but hoped her sentence would send a message to China that it needed to halt its economic espionage. 

She cited the crime’s cost and reviewed the investigation’s extensive history, the secret warrants, wiretaps and the tens of thousands of pages of court filings she had reviewed.
To think, she said, this “all started with a man in a field.”

Nation of Thieves

Chinese man going to prison for stealing US corn seeds, DuPont trade secrets
www.foxnews.com

Corn theft is taken seriously in United States.

A naturalized American citizen originally from China has been sentenced to three years in prison for his part in stealing corn scientifically-enhanced seeds and sending them to a corporation in Beijing.
Businessman Mo Hailong, employed by Beijing’s Kings Nower Seed, worked with five other Chinese nationals to rob trade secrets from a pair of American agricultural heavyweights: Dupont Pioneer and Monsanto.
Working side by side, the team reportedly smuggled around 1,000 pounds of corn seeds to Beijing (some of which were discovered by custom officers hidden in manila envelopes surrounded by boxes of microwaveable popcorn). 

Those samples that made it through customs were sent out to scientists at Beijing Dabeinong Technology Group Co., the parent company of Kings Nower Seed, to be studied and duplicated in the country.
“We need to send a message to China that this kind of criminal behavior is not tolerated in the United States,” said US District Court Judge Stephanie Rose, who presided over the case, on Wednesday when handing over the ruling decision.
But stealing these patented seeds isn't something either of these companies take likely.

And the U.S. government agrees. 

According to the FBI a “parent” or “inbred” seed “constitutes valuable intellectual property of a seed producer.” 

Based on a press release the bureau released related to a seed theft in 2013, “the estimated loss on an inbred line of seed is approximately five to eight years of research and a minimum of 30 to 40 million dollars.”
Monsanto has previously aggressively protected its technology, and has been known to sue farmers who saved seeds from prior plantings for reuse. 

That action violates a contract farmers using Monsanto seeds are required to sign.
Now Hailong, who lived in America for two decades and has a wife and two children who are all U.S. citizens, will likely face deportation when he’s released. 

He’ll also have to pay restitution to Monsanto and Dupont Pioneer for the theft.