FBI Criminal Probe of Kansas University Started Over Chinese Stealing Rice

August 23, 2019 Updated: August 23, 2019

The FBI criminal fraud probe of Kansas University’s Life Sciences Labs follows a 2018 conviction of Chinese-born nationals for stealing $75 million of genetically-modified rice.

The FBI began focusing on China’s attempts to steal high-value intellectual property in Kansas after U.S. Customs and Border Enforcement Agents checking bags for the return flight of a Chinese agricultural delegation visiting Kansas, discovered a third of a cup of genetically-modified rice that cost Ventria Biosciences $75 million to develop.

The Kansas City Star reported that Weiqiang Zhang, a Chinese national and former genetic rice researcher at Kansas State University with lawful permanent residence, was sentenced to prison for intellectual property theft and for conspiring with China-born Wengui Yan, a naturalized U.S. citizen who worked as a USDA geneticist at the Dale Bumpers National Rice Research Center in Stuttgart, Arkansas.

Zhang and Yan traveled in 2012 to a China crop research institute where Zhang once worked. The conspirators then used Yan’s connections to send official U.S. Department of Agriculture letterhead to invite a delegation from the Chinese institute to visit Kansas.

Zhang was a rice researcher at Kansas State University and received a doctorate in rice genetics from Louisiana State University. He began working for venture capital funded Ventria in 2008, where he was in charge of biopharmaceutical company’s plant breeding and nursery operations.

Ventria utilizes its patented ExpressTec to genetically program recombinant DNA proteins from rice for biotechnology and medicines. Its production process can express “multi-subunit molecules, monoclonal antibodies, fusion proteins, and enzymes” that are free of contamination from any by-products of animal, human, or microbial origin.

As one of six employees with access to Ventria’s climate-controlled seed banks at its Junction City storage facility, Zhang was able to steal hundreds of modified rice seeds developed to treat health issues such as antibiotic-associated diarrhea, hepatic disease, gastrointestinal disease, osteoporosis and inflammatory bowel syndrome.

Zhang hid the rice seeds at his family’s home in Manhattan, KS, until passing 79 grams of seeds to the Chinese delegation before they returned home. Ventria became suspicious when Zhang asked to leave work when the Chinese delegation arrived. When later asked by his supervisor his reason for leaving, Zhang reportedly turned red.

After Border Control agents discovered the seeds in checked bags, a U.S. Department of Agriculture expert identified the specialized rice as coming from Ventria Biosciences. Lab tests subsequently confirmed the genetically-modified seeds came from Ventria.

What appeared to be a state-sponsored intellectual property theft scheme was referred to the FBI, which obtained a search warrant for Zhang’s home. Despite finding seeds in Zhang’s kitchen freezer and master bedroom, he claimed no knowledge of their origin.

A jury convicted Weiqiang Zhang of conspiracy to steal trade secrets, conspiracy to commit interstate transit of stolen property, and interstate transit of stolen goods. Zhang was sentenced to 121 months in federal prison, without possibility of parole.

The U.S. Justice Department announced Wengui Yan pleaded guilty to making false statements to investigators and agreed to cooperate in the investigation. Yan received a lighter sentence of up to 20 months in federal prison.

Justice Department’s Criminal Division Attorney General John P. Cronan issued an April 2018 news release stating that federal prosecutors and law enforcement partners “will continue to work closely with companies like Ventria to protect American intellectual property—which is essential to our economy and way of life—against all threats both foreign and domestic.”

Chriss Street is an expert in macroeconomics, technology, and national security. He has served as CEO of several companies and is an active writer with more than 1,500 publications. He also regularly provides strategy lectures to graduate students at top Southern California universities. 

 

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