China's Organized Crime Syndicate

Huawei Charged With Racketeering, Stealing Trade Secrets

U.S. Prosecutors Hit Huawei With New Federal Charges

By MERRIT KENNEDY

The Chinese technology firm Huawei is facing a raft of U.S. federal charges, including racketeering conspiracy.

Federal prosecutors have added new charges against Chinese telecom giant Huawei, its U.S. subsidiaries and its chief financial officer, including accusing it of racketeering and conspiracy to steal trade secrets from U.S.-based companies.
The company already faced a long list of criminal accusations in the case, which was first filed in August 2018, including bank fraud, wire fraud and conspiracy to defraud the United States. Prosecutors filed the expanded indictment in federal court in Brooklyn on Thursday.

"The Trump administration has repeatedly made clear it has national security concerns about Huawei, including economic espionage," NPR's Ryan Lucas reported. 

Recently, President Trump tried to convince the U.K. not to contract with Huawei to provide equipment to build a 5G network, but British leaders did so anyway.

Sens. Richard Burr, R-N.C., and Mark Warner, D-Va., said in a joint statement that the indictment "paints a damning portrait of an illegitimate organization that lacks any regard for the law."

Huawei is also accused of doing business in countries subject to U.S. sanctions such as North Korea and Iran. 

Prosecutors accuse Huawei of helping Iran's government "by installing surveillance equipment, including surveillance equipment used to monitor, identify and detain protesters during the anti-government demonstrations of 2009 in Tehran, Iran."
They say that for decades, Huawei has worked to "misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei's business."
Huawei pushed its employees to bring in confidential information from competitors, even offering bonuses for the "most valuable stolen information," according to the indictment.
The 56-page indictment is rife with examples of Huawei scheming to obtain trade secrets from U.S. companies. 

They also attempted to recruit employees from rival companies or would use proxies such as professors working at research institutions to access intellectual property.
For example, starting in 2000 the defendants took source code and user manuals for Internet routers from an unnamed northern California-based tech company, and incorporated it into its own routers. 

They then marketed those routers as a lower-cost version of the tech company's devices. 

During a 2003 lawsuit, Huawei claimed that it had removed the source code from the routers and recalled them, but also erased the memories of the recalled devices and sent them to China so they could not be used as evidence.
In an incident that drew headlines last year, a Huawei employee in 2012 and 2013 repeatedly tried to steal technical information about a robot from an unnamed wireless network operator, eventually going as far as making off with the robot's arm. 

The details match those in a separate federal lawsuit in Seattle where the company is accused of targeting T-Mobile.
A subsidiary of the firm also entered into a partnership in 2009 with a New York and California-based company working to improve cellular telephone reception. 

Despite a nondisclosure agreement, Huawei employees stole technology. 

The subsidiary eventually filed a patent that relied on the other company's intellectual property.

Chinese theft of trade secrets on the rise

• The Justice Department launched the “China Initiative” with the aim of countering Chinese national security threats.
• “The issue is that their industrial policy, the way they try to accomplish that, is state-sponsored theft or creating an environment that rewards it,” U.S. Deputy Assistant Attorney General Adam Hickey told CNBC.

By Nancy Hungerford


China’s legal environment rewards intellectual property theft: DOJ

As President Donald Trump puts pressure on Beijing to end unfair business practices, the Department of Justice has a warning for companies: Bolster your defenses.
“More cases are being opened that implicate trade secret theft” — and more of them point to China, said U.S. Deputy Assistant Attorney General Adam Hickey.
Since 2012, more than 80% of economic espionage cases brought by the department’s National Security Division have implicated China. 

The frequency of cases has been rising in recent years, according to Hickey.
“That may be because the victims are more attentive to what’s happening, which is a good thing,” Hickey told CNBC in Singapore on Saturday. 

“They may be more comfortable reporting to law enforcement, which is a good thing. They may be fed up, which is also a good thing.”
The Justice Department launched the “China Initiative” in November 2018 with the aim of countering Chinese national security threats. 

It does so by identifying and prosecuting trade-secret and intellectual property (IP) theft, hacking and economic espionage.

‘State-sponsored theft’
Hickey is unequivocal in his defense of the Justice Department’s motives.
“We expect other nations will want to become self-sufficient in critical technologies. That’s what we’d expect of a responsible government,” he said. 

“The issue isn’t that China has set out to do that. It’s that part of their industrial policy, part of the way they try to accomplish that, is state-sponsored theft or creating an environment that rewards or turns a blind eye to it.”
He pointed to evidence of such behavior linked to the “Made in China 2025” strategic plan. 

The Chinese government introduced the plan in 2015, designed to reduce dependence on imported technology in 10 priority industries including robotics, IT, aviation, railway transport and biopharma. “We’ve charged cases, I believe, in eight of those 10 sectors, IP theft cases,” Hickey said.
The Justice Department’s China Initiative also puts an emphasis on cybersecurity threats and telecommunication vulnerabilities.
Hickey declined to comment on Chinese telecommunication giant Huawei as it is currently the subject of two prosecutions in the United States.
However, he weighed in on the threat to national security from telecom companies and supply chains more broadly. 

“It’s going to matter where that company is located and whether they can be leveraged to comply with an intelligence service without regard to the rule of law that has to be relevant,” he said.

Huawei CEO and founder, Ren Zhengfei, told CNBC in April that his company would “never install a back door” on its equipment — even if ordered by the Chinese government to do so. 

Ren said: “It would be impossible for us to provide customer information to any third party.”

Experts, however, have told CNBC that Huawei will have no choice but to comply with the Chinese government’s requests.
Hickey stressed the need to look not only at whether there is a so-called back door or an intentional vulnerability, but also at whether there’s intent and capability of a government to leverage that company.
“If you are looking for a smoking gun and you wait for it, you might end up with a gunshot,” Hickey warned.

Linked In Spying for China

China is using LinkedIn to recruit Americans

By Warren Strobel, Jonathan Landay

Chinese spy nest

WASHINGTON -- The United States’ top spy catcher said Chinese espionage agencies are using fake LinkedIn accounts to try to recruit Americans with access to government and commercial secrets, and the company should shut them down.
William Evanina, the U.S. counter-intelligence chief, told Reuters in an interview that intelligence and law enforcement officials have told LinkedIn, owned by Microsoft Corp., about China’s “super aggressive” efforts on the site.
He said the Chinese campaign includes contacting thousands of LinkedIn members at a time, but he declined to say how many fake accounts U.S. intelligence had discovered, how many Americans may have been contacted and how much success China has had in the recruitment drive.
German and British authorities have previously warned their citizens that Beijing is using LinkedIn to try to recruit them as spies. 

But this is the first time a U.S. official has publicly discussed the challenge in the United States and indicated it is a bigger problem than previously known.
Evanina said LinkedIn should look at copying the response of Twitter, Google and Facebook, which have all purged fake accounts allegedly linked to Iranian and Russian intelligence agencies.
“I recently saw that Twitter is cancelling, I don’t know, millions of fake accounts, and our request would be maybe LinkedIn could go ahead and be part of that,” said Evanina, who heads the U.S. National Counter-Intelligence and Security Center.
It is highly unusual for a senior U.S. intelligence official to single out an American-owned company by name and publicly recommend it take action. 

LinkedIn boasts 562 million users in more than 200 counties and territories, including 149 million U.S. members.
Evanina did not, however, say whether he was frustrated by LinkedIn’s response or whether he believes it has done enough.
LinkedIn’s head of trust and safety, Paul Rockwell, confirmed the company had been talking to U.S. law enforcement agencies about Chinese espionage efforts. 

Earlier this month, LinkedIn said it had taken down “less than 40” fake accounts whose users were attempting to contact LinkedIn members associated with unidentified political organizations. Rockwell did not say whether those were Chinese accounts.
“We are doing everything we can to identify and stop this activity,” Rockwell told Reuters. 

“We’ve never waited for requests to act and actively identify bad actors and remove bad accounts using information we uncover and intelligence from a variety of sources including government agencies.”
Rockwell declined to provide numbers of fake accounts associated with Chinese intelligence agencies. 

He said the company takes “very prompt action to restrict accounts and mitigate and stop any essential damage that can happen” but gave no details.
LinkedIn “is a victim here,” Evanina said. 

“I think the cautionary tale ... is, ‘You are going to be like Facebook. Do you want to be where Facebook was this past spring with congressional testimony, right?’” he said, referring to lawmakers’ questioning of Facebook CEO Mark Zuckerberg on Russia’s use of Facebook to meddle in the 2016 U.S. elections.

EX-CIA OFFICER ENSNARED
Evanina said he was speaking out in part because of the case of Kevin Mallory, a retired CIA officer convicted in June of conspiring to commit espionage for China.
A fluent Mandarin speaker, Mallory was struggling financially when he was contacted via a LinkedIn message in February 2017 by a Chinese posing as a headhunter, according to court records and trial evidence.
The individual, using the name Richard Yang, arranged a telephone call between Mallory and a man claiming to work at a Shanghai think tank.
During two subsequent trips to Shanghai, Mallory agreed to sell U.S. defence secrets -- sent over a special cellular device he was given -- even though he assessed his Chinese contacts to be intelligence officers, according to the U.S. government’s case against him. 

He is due to be sentenced in September and could face life in prison.
While Russia, Iran, North Korea and other nations also use LinkedIn and other platforms to identify recruitment targets, the U.S. intelligence officials said China is the most prolific and poses the biggest threat.
U.S. officials said China’s Ministry of State Security has “co-optees” -- individuals who are not employed by intelligence agencies but work with them -- set up fake accounts to approach potential recruits.
The targets include experts in fields such as supercomputing, nuclear energy, nanotechnology, semi-conductors, stealth technology, health care, hybrid grains, seeds and green energy.
Chinese intelligence uses bribery or phony business propositions in its recruitment efforts. 

Academics and scientists, for example, are offered payment for scholarly or professional papers and, in some cases, are later asked or pressured to pass on U.S. government or commercial secrets.
Some of those who set up fake accounts have been linked to IP addresses associated with Chinese intelligence agencies, while others have been set up by bogus companies, including some that purport to be in the executive recruiting business, said a senior U.S. intelligence official, who requested anonymity in order to discuss the matter.
The official said “some correlation” has been found between Americans targeted through LinkedIn and data hacked from the Office of Personnel Management, a U.S. government agency, in attacks in 2014 and 2015.
The hackers stole sensitive private information, such as addresses, financial and medical records, employment history and fingerprints, of more than 22 million Americans who had undergone background checks for security clearances.
The United States identified China as the leading suspect in the massive hacking.

UNPARALLELED SPYING EFFORT
About 70 percent of China’s overall espionage is aimed at the U.S. private sector, rather than the government, said Joshua Skule, the head of the FBI’s intelligence division, which is charged with countering foreign espionage in the United States.
“They are conducting economic espionage at a rate that is unparalleled in our history,” he said.
Five current and former U.S. officials -- including Mallory -- have been charged with or convicted of spying for China in the past two and a half years.
He indicated that additional cases of suspected espionage for China by U.S. citizens are being investigated, but declined to provide details.
U.S. intelligence services are alerting current and former officials to the threat and telling them what security measures they can take to protect themselves.
Some current and former officials post significant details about their government work history online -- even sometimes naming classified intelligence units that the government does not publicly acknowledge.
LinkedIn “is a very good site,” Evanina said. 

“But it makes for a great venue for China to target not only individuals in the government, formers, former CIA folks, but academics, scientists, engineers, anything they want. It’s the ultimate playground for collection.”

FBI Director Christopher Wray: "China is the broadest, most significant threat to the US and its espionage is active in all 50 states"

• There are economic espionage investigations linked to China in every US state, and China wants to become the sole dominant superpower.
• China's intelligence success is due to its ability to act in a whole of state effort, and its capacity to take a patient, long-term view.

By Tara Francis Chan

FBI Director Christopher Wray speaking at Aspen Security Forum.

Amid rampant discussion about Russia's election interference and espionage activities, FBI Director Christopher Wray has deemed China the largest and most concerning threat to the US.
Speaking at the Aspen Security Forum on Wednesday, Wray was asked about whether he sees China as an adversary and, if so, to what level
"China, from a counterintelligence perspective, represents the broadest, most challenging, most significant threat we face as a country," Wray answered.
"And I say that because for them it is a whole of state effort. It is economic espionage, as well as traditional espionage, it is non traditional collectors, as well as traditional intelligence operatives, it's human sources, as well as cyber means.
"We have economic espionage investigations in every state, all 50 states, that trace back to China. It covers everything from corn seeds in Iowa to wind turbines in Massachusetts and everything in between. So the volume of it, the pervasiveness of it, the significance of it, is something this country cannot underestimate."
The comments follow a 2017 US Trade Representative report which accused China of "trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports." 

The report found intellectual property theft by China was costing the US cost up to $600 billion annually.
It seems a far more strategic and wide-ranging effort than Russia's ongoing interference efforts which returned to headlines this week amid President Donald Trump's panned summit with Vladimir Putin.
Wray acknowledged that Russia needs to be dealt with "aggressively," but far more concerning is China's efforts to position itself as "the sole dominant superpower, the sole dominant economic power."
"They're trying to replace the US in that role and so theirs is a long-term game that's focused on just about every industry, every quarter of society in many ways. It involves academia, it involves research and development, it involves everything from agriculture to high tech. And so theirs is a more pervasive, broader approach but in many ways more of a long-term threat to the country," Wray said.
This isn't the first time China's patience and willingness to play the long game has been described as the reason its interference campaigns are more successful than those of Russia.
John Garnaut.

Earlier this year, John Garnaut, who led a secret government inquiry into China's political influence in Australia, told the US House Armed Services Committee that Russia prefers "focused, sharp strikes" while Beijing's actions are more incremental.
"Unlike Russia, which seems to be as much for a good time rather than a long time, the Chinese are strategic, patient, and they set down foundations of organizations and very consistent narratives over a long period of time," Garnaut told the committee.
Garnaut's report found China has attempted to influence politics at all levels in Australia. 

The Australian government has since introduced new foreign interference laws— much to Beijing's ire — and the issue is frequently discussed and debated in the public sphere.
It's this widespread shift towards a consensus on China's influence and interference attempts that Wray describes as "one of the bright spots" since he became FBI director just over 10 months ago.
"It's one of the few things I've seen that, in a country where it feels like some people can't even agree on what day of the week it is, on this I think people are starting to come together," Wray said.
"I see it in the interagency, I see it up on the Hill when I'm talking to the intelligence committees across the spectrum. I think people are starting to wake up and rub the cobwebs, or sleep, out of their eyes. And my hope is we're in a moment where we can pivot and start to take this much more seriously."

"China is our number one adversary with respect to economic espionage." -- William Evanina

Top U.S. Spymaster Warns American Firms About Deals With China

By Sara Forden and David McLaughlin

The top U.S. counterintelligence official said American firms need to be cognizant of the national security risks that could arise from selling to Chinese buyers or entering into joint ventures with them.
William Evanina, the Director of the National Counterintelligence and Security Center, said it’s understandable that executives and owners of American companies want to do the most lucrative deals, but they don’t always understand the potential risks to national security.
Evanina’s comments come as the Trump administration and lawmakers in Washington move to toughen the framework for reviewing acquisitions by Chinese investors.
"China is our number one adversary with respect to economic espionage," Evanina said in an interview at Bloomberg in Washington Thursday. 

"Their ability to steal proprietary information and trade secrets is proficient and it’s aggressive."
Evanina’s comments show the extent of concern within the U.S. intelligence community about China’s push to acquire U.S. technology. 

A slew of proposed deals by Chinese investors have struggled to gain approval from a secretive panel that reviews takeovers by foreign buyers for national security threats.
Among the deals under review by the Committee on Foreign Investment in the U.S. are MoneyGram International Inc.’s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma, and Genworth Financial Inc.’s $2.7 billion sale to China Oceanwide Holdings Group Co.

Broken Deals
Several proposed takeovers by Chinese investors have fallen apart over opposition from CFIUS. 

The latest came Tuesday when Chinese investors, led by digital-map provider NavInfo Co., called off plans to buy a stake in counterpart HERE Technologies. 

Earlier this month, U.S. President Donald Trump blocked a China-backed takeover of Lattice Semiconductor Corp. on the recommendation of the panel.
Evanina outlined a scenario in which the sale of a defense-based technology company could harm the U.S.’s ability to ensure supplies for military equipment such as fighter jets and ships.
"That’s where we have to be really creative to explain that this is a national security threat," he said. "It’s something we have to continue to drive, especially when it involves technology."
Congress is planning to reshape the CFIUS framework as concerns about China’s deal-making have intensified in Washington. 

Republican Senator John Cornyn of Texas, who has warned that Chinese investment has the potential to undermine U.S. military capabilities, says CFIUS should have broader scope to review foreign takeovers. 

The panel should examine joint ventures and minority stakes, not just acquisitions, he said at a June speech in Washington.
Evanina said he supported reforming how CFIUS works.
"The CFIUS process is old, antiquated and it’s being reformatted," he said. 

"There are a lot of people in the government working very hard to make it a useful tool for what we want to do."

3.8 Million Chinese Spies

Ex-IBM Employee Guilty of Stealing Secrets For China
By Jeff John Roberts

A former developer for IBM pled guilty on Friday to economic espionage and to stealing trade secrets related to a type of software known as a clustered file system, which IBM sells to customers around the world.
Xu Jiaqiang stole the secrets during his stint at IBM from 2010 to 2014 "to benefit the National Health and Family Planning Commission of the People’s Republic of China," according to the U.S. Justice Department.
In a press release describing the criminal charges, the Justice Department also stated that Xu tried to sell secret IBM source code to undercover FBI agents posing as tech investors. (The agency does not explain if Xu's scheme to sell to tech investors was to benefit China or to line his own pockets).
Part of the sting involved Xu demonstrating the stolen software, which speeds computer performance by distributing works across multiple servers, on a sample network. 

The former employee acknowledged that others would know the software had been taken from IBM, but said he could create extra computer script to help mask his origins.
Xu, who is a Chinese national who studied computer science at the University of Delaware, will be sentenced on October 13.
The Justice Department's press release does not identify IBM, but instead refers to "the Victim Company." 

But other news outlets name IBM as the target of the theft, while a LinkedIn page with Xu's name shows he worked at IBM as a file system developer during the relevant dates.
IBM did not immediately respond to request for comment on Sunday.
This isn't the first time that Chinese nationals have carried out economic espionage against American companies. 

In 2014, the Justice Department charged five Chinese hackers for targeting U.S. nuclear and solar energy firms. 

And late last year, the agency charged three others for hacking U.S. law firms with the goal of trading on insider information that they obtained.

Nation of Thieves

Chinese counterfeiters and hackers cost US up to $600 billion a year

By Paul Wiseman

Counterfeit goods, software piracy and the theft of trade secrets cost the American economy as much as $600 billion a year, a private watchdog says.
In a report out Monday, the Commission on the Theft of American Intellectual Property says the annual losses range from about $225 billion to $600 billion. 

The theft of trade secrets alone costs the United States between $180 billion and $540 billion annually. 

Counterfeit goods cost the United States $29 billion to $41 billion annual; pirated software costs an additional $18 billion a year.
The findings echo those of the Office of the Director of National Intelligence, which in 2015 pegged the annual cost of economic espionage by computer hacking at $400 billion.
The commission labels China the world's No. 1 culprit. 

China accounts for 87 percent of counterfeit goods seized entering the United States. 

The report says the Chinese government encourages intellectual property theft.
The commission is led by former Republican presidential candidate and Utah Gov. Jon Huntsman, who also served as U.S. ambassador to China, and Adm. Dennis Blair, a former director of U.S. national intelligence.
"The vast, illicit transfer of American innovation is one of the most significant economic issues impacting U.S. competitiveness that the nation has not fully addressed," Huntsman said. 

"It looks to be, must be, a top priority of the new administration."

Theft Empire

Treasury and Justice officials pushed for economic sanctions on China over cybertheft
By Ellen Nakashima

Obama noted at a news conference this month that the United States has seen “some evidence” that Chinese government hackers have reduced their pilfering of U.S. companies’ intellectual property and sensitive data.
But, he added, they have “not completely eliminated these activities.”
Although some researchers say the hacking activity has plummeted, officials at the Treasury and Justice departments and at the National Security Council have been pushing to impose economic sanctions on Chinese firms that have benefited from past thefts of U.S. firms’ commercial data.
Over the past year, they have advocated the use of a 2015 executive order on cyber-sanctions that would allow the government to sanction individuals and companies that were enriched by material hacked from the computer networks of American businesses.
“It’s about specific justice for specific victims,” said one U.S. official, who like others interviewed requested anonymity to discuss internal deliberations.
A sanctions package that names specific Chinese companies has been ready for more than a year. 

But pro-China senior officials in the State Department and within the National Economic Council have been opposed.

The administration was close to pulling the trigger on the sanctions last year but drew back after Xi Jinping reached an agreement with Obama that his country would not conduct such activity, and would set up a high-level joint dialogue on cybercrime and cooperate in investigations.
Dmitri Alperovitch, co-founder of the cybersecurity firm CrowdStrike, said China’s commercial hacking dropped over the past year after the agreement. 

Others note, however, that the indictments of five Chinese military hackers for economic espionage also played a role in changing China’s behavior.
But Beijing’s cooperation in law enforcement matters has not been optimal, officials said. 

And the Chinese government has not taken action against those who hacked U.S. companies and stole their intellectual property or pricing information.
If the Obama administration were to impose economic sanctions on Chinese companies, that would be a gift to President Donald Trump, said James A. Lewis, a cyber-policy expert at the Center for Strategic and International Studies. 

“It would be a chit he could trade in talks with the Chinese,” he said. 

“He could offer to lift sanctions in exchange for some economic or trade concession.”
At this point, the use of the order against China is highly unlikely, officials said.
“It’s hard to see the administration picking that fight with China with so few days left in the administration,” a second senior official said.
The Trump administration, however, could choose to use it.

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.”