Chinese Nationals Charged with Conspiracy to Steal Rice Technology

LITTLE ROCK—Two rice researchers from China have been charged in a conspiracy to steal rice production technology in an alleged attempt to bring this proprietary science back to China.

Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office, announced the indictment of Liu Xuejun, 49, and Sun Yue, 36, both of China, for conspiracy to steal trade secrets and conspiracy to commit interstate transportation of stolen property.

A federal grand jury returned an indictment against Liu and Sun on Friday for their involvement in the theft of rice seeds designed for use in the medical field. The rice seeds were developed by a company called Ventria Bioscience, which used technology to create rice seeds that contained certain proteins. These proteins could then be removed from the rice and used in medicines and pharmaceutical products. Ventria, which is headquartered in Colorado and has a rice production facility in Kansas, has invested approximately $75 million in developing the intellectual property behind these rice seeds.

"These rice seeds may be small, but the research and investment that went into the science that made them possible is of great value," Hiland said. "We remain vigilant in our efforts at protecting both intellectual and real property from theft by other nations, and it is our intention to present our case to an Arkansas jury based on the crimes alleged in the indictment."

Liu and Sun visited the United States in 2013. At that time, they both worked at the Crops Research Institute in Tianjin, China. Liu was a professor, and Sun was a research associate. They came to the United States to visit several rice research and production facilities, and their visit included a stop at the Dale Bumpers National Rice Research Center in Stuttgart.

Their trip was organized by Weiqiang Zhang, who was a rice breeder at Ventria in Kansas, and Wengui Yan, who worked at the Dale Bumpers Rice Research Center in Stuttgart. When Liu and Sun ended their trip, they flew to Honolulu, Hawaii, on their way back to China. At the Honolulu airport, U.S. Customs and Border Protection found stolen rice seeds in Liu and Sun’s luggage, including seeds from the Dale Bumpers National Rice Research Center as well as seeds from the Ventria rice production facility in Kansas.

"Today’s indictment of Liu and Sun should not go unnoticed by those who seek to steal our trade secrets and technology," FBI SAC Upchurch said. "This type of crime is consistent with China’s social and economic five-year plan to modernize their seed industry. We appreciate the efforts of the United States Attorney’s Office and together we will remain steadfast in protecting the United States’ intellectual property."

The two rice researchers who helped organize Liu and Sun’s trip to the United States were convicted of their involvement in the scheme in a connected case in the District of Kansas (see link to press release below). Zhang, 47, was convicted at trial and sentenced to 10 years’ imprisonment. Yan, 63, who worked in Stuttgart, pleaded guilty and was sentenced to one year in prison.

A violation of conspiracy to commit theft of trade secrets, under Title 18, United States Code, Section 1832, carries a maximum penalty of not more than 10 years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised release. A violation of conspiracy to commit interstate transportation of stolen property, under Title 18, United States Code, Section 371, carries a maximum penalty of not more than five years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised release.

The case was investigated by the FBI, and is being prosecuted by Assistant United States Attorney Allison W. Bragg. An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.