Espionage in the Heartland: Rice to China
On 12 December 2013, a criminal complaint was filed by the United States Attorney in the Kansas District, petitioning for the arrest of two individuals, with ties to China, for the theft of trade secrets from Ventria Bioscience and other companies. Subsequently, these same two individuals were indicted for “conspiracy to steal trade secrets” by a federal grand jury on 18 December. The two individuals, Wieqiang Zhang and Wengui Yan, accused of stealing the intellectual property of Ventria Bioscience and other entities for the past 3+ years, October 2010 through December 2013, when they duo were arrested. The pair, specifically targeted Ventria’s methods of “developing, propagating, growing, cultivating, harvesting, cleaning, and storing particular agriculture seeds for cost-effectively producing recombinant proteins from such seeds.” The genetic work conducted by Ventria specifically, “develops and produces particular agricultural seeds, which have been designed to express proteins used in the medical and pharmaceutical fields.” According to the CEO of Ventria, as detailed in the criminal complaint, the current level of investment made by his company is approximately $75 million, and the research investment in the specific seeds stolen by the pair was between $3 and $18 million, with lost of profits in the event of commercialization by another entity to be substantially larger.
Unique rice seeds harvested
The criminal complaint details the unique nature of the seeds which were stolen by Zhang and Yan. One of the seeds, “make a recombinant protein that is being developed for use as a therapeutic excipient.” The other seed, “makes a different recombinant protein that is being developed to treat or prevent gastrointestinal disease, antibiotic, associated diarrhea, hepatic disease, osteoporosis,and inflammatory bowel disease.” While it may appear on the surface to be a case of two individuals stealing genetically modified seeds in a case of corporate espionage, similar to that which occurred over the past four years by a separate group conducting industrial espionage and operating in the upper-midwest (Espionage in the Heartland: Corn to China) of the United States, the activities of Zhang and Yan specifically targeted long term agricultural pharmaceutical research. In this instance, the Chinese nation state hand is less obtuse.
Nation State sponsorship
According to the data contained within the criminal complaint, a Chinese delegation’s checked and unchecked luggage was searched on 07 August 2013 as the delegation was preparing to depart to China (PRC). The search revealed seeds which were believed to be taken from Ventria Bioscience and/or the USDA Dale Bumpers National Rice Research Center, and varieties protected under “Plant Variety Protection Act” certificates owned by Louisiana State University or Ventria. The four PRC visitors had visited an unidentified US agricultural facilities in Chesterfield, MO and Creve Coeur, MO (Prevendra’s analysis identifies Monsanto as having facilities in both Chesterfield and Creve Coeur, MO). The delegation in fact had visited the facilities on 18 July 2013 in the company of Zhang. The delegation also traveled to the Dale Bumpers Center in Stuttgart, AR on 22 July 2013. Yan had access to the seed varieties which were found during the 07 August 2013 search by US Customs and Border Patrol personnel.
Yan’s correspondence with the China Crops Research Institute (CCRI) indicates Yan used his position within the USDA to create invitation letters for the delegation to visit the US. The CCRI delegation organizer in China corresponded with Zhang and Yan jointly. Zhang and Yan used their work email as well as web-based emails (Yahoo!, Hotmail and Gmail). Indicative of one attempting to shield the content from one’s employer, be it private sector (Ventria) or government (USDA).
Zhang: One of the emails obtained from Zhang’s hotmail account detailed the modalities of housing allowances and stipends within the Hexi District of China. Zhang’s emails also showed a letter to the Crops Research Institute asking for a housing subsidy be provided to him and his intent to continue to obtain Ventria’s research so as to enable similar research and development in biology in Tainjin, China (see copy of the criminal complaint below for full test).
Yan: Similarly, in November 2012, Yan wrote “2012 YAN Wengui’s Activities in Serving the Nation” (Note: Yan became a US citizen in November 2000). The criminal complaint notes how Yan lists:
– Provide rice research breeds accelerating China’s science research;
– Recommend the US science technology to accelerate Chinese agriculture science research and faster development in modernizing production
– Returning to the country [China] to proceed science and technology exchange, research cooperation and assist Chinese professors advising research students;
– Train talents for the Chinese agricultural science and technology.[/custom_blockquote]
While Zhang, a PRC citizen engaged in corporate espionage / industrial espionage, one could explain his activities as one supporting the PRC given the benefactor was the Crop Research Institute of China, which is a part of the Chinese Academy of Agricultural Science (CAAS) and a PRC State Key Lab. It would be difficult, if impossible, for Zhang to have said no when the PRC state requested his assistance.
Yan on the other hand is not a PRC citizen. His actions warrant review of his activities starting when he arrived in the United States at the University of California (Davis) in 1987 through the date of his arrest in Stuttgart, AR, as his “report” of 2012 clearly demonstrates his serving his birth nation (China).
The two accused of intellectual property theft:
Wieqiang Zhang (張偉強), 47, is a citizen of the PRC and lawful permanent resident in the United states, residing in Manhattan, Kansas. He is an employee of Ventria Bioscience at their Junction City, KS facility. Zhang was employed by Ventria since 2008 (five plus years). He received his Ph.D, in Rice Genetics, breeding and molecular biology from Louisiana State University (2001-2005), his masters degree in agriculture in China (1992). While in China he worked at a Crop Research Institute in the development and production of rice. His LinkedIn profile shows him to be a member of the “Plant Breeding Jobs” LinkedIn network. An internet search shows his residence to be a six bedroom single family house (>$350,000), located in Manhattan, KS. According to Riley County, KS records, the house was built in 2010, with Zhang being the original owner the house with a Qi Honglei.
Wengui Yan (嚴文貴), 63, a naturalized US citizen (November 2000), having immigrated from the PRC in 1987, resides in Stuttgart, Arkansas. He received his masters and undergraduate degrees from Sichuan Agricultural University in China. In approximately 1992 he received his PHD in Plant Genetics and Breeding from the University of Arkansas. Since 1996, he has been an employee of the USDA Dale Bumpers National Rice Research Center, also located in Stuttgart, AR. An internet search shows he resides in a single-family residence located in Stuttgart, AR. According to the Arkansas County, AR records, the 2300+ sq ft home was purchased by Yan for $100,000 in 1997 and is currently valued at approximately $160,000. His Linkedin profile shows him to be a plant geneticist. Further research shows Yan holds patents associated with rice genomics. One patent identifies Yan as the owner, while the second has Yan as being a part of a team of researchers.
“USA vs ZHANG & YAN”– PDF of the [bsk-pdf-manager-pdf id=4]
“The World Press”
Two Agricultural Scientists from China Charged with Stealing Trade Secrets (FBI – 12 Dec)
US Charges Chinese Nationals in Trade Secrets Cases (Wall Street Journal – 13 Dec)
Judge in Kansas orders scientist from China detained (Businessweek – 18 Dec)
Grand Jury in Kansas indicts Chinese scientists (San Jose Mercury News – 20 Dec)
Jury in Kansas indicts Chinese scientists (Taipei Times – 22 Dec)
“Espionage in the Heartland: Corn to China” 
Espionage in the heartland of the United States?
For two-plus years, perhaps for as many as four, a different type of harvesting has been occurring throughout the heartland of the United States. According to the criminal complaint (see below), filed by the United States Attorney, Nicholas A. Klinefeldt, a Chinese company, Kings Nower Seed,and their personnel have been harvesting more than $30 million worth of intellectual property from multiple US conglomerates. The criminal complaint requests an … <read complete analysis>
“Secrets Stolen, Fortunes Lost”: As detailed in Secrets Stolen, Fortunes Lost, the intellectual property of companies in the United States, regardless of locale, are of interest to those who have no problem extracting the research and development investment to avoid making their own. The introduction to Secrets Stolen, Fortunes Lost admonishes:
Intellectual property is your enterprise’s lifeblood; is it safe or are you in danger of being put out of business because a predator has shed that lifeblood? We have found two profound but common misconceptions about intellectual property theft and economic espionage.
One of the great misconceptions is that the threat of economic espionage or trade secret theft is a limited concern—that it is an issue only if you are holding on to some- thing like the formula for Coca-Cola or the design of the next Intel microprocessor. The many real-world stories included in this book illustrate the fallacy of thinking that this threat is someone else’s problem.
The other great misconception, held by many business leaders who do acknowledge the danger to their trade secrets and other intellectual property, is that the nature of this threat is sufficiently understood and adequately addressed. Often, on closer inspection, the information-protection programs these business leaders rely on are mired in Industrial Age thinking; they have not been adapted to the dynamic and dangerous new environment forged by globalization
Secrets Stolen, Fortunes Lost, Preventing Intellectual Property Theft and Economic Espionage in the 21st Century (Syngress 2008 – by Christopher Burgess and Richard Power)
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