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US federal prosecutors delve further into theft of trade secrets by Chinese company

DES MOINES, Iowa -- The value of the patented seed allegedly stolen from U.S. seed corn companies likely exceeds US$500 million, federal prosecutors said Thursday.

The new estimate surfaced in a custody hearing Thursday for Mo Yun, a Chinese woman charged as part of what prosecutors say was a conspiracy involving seven employees of a Chinese agriculture biotechnology company to steal trade secrets.

Information gathered as part of the investigation into theft of seed corn from fields in Iowa and Illinois revealed that some was among Pioneer's highest yielding and most successfully developed seed, FBI Special Agent Mark Betten testified at the hearing in federal court. Additional seed also is alleged to have been stolen from Monsanto.

Seed developers in the highly competitive industry spend years and millions of dollars on research developing improved corn genetics that increase production and toughen resistance to drought and insects. The government alleges in indictments that the group of Chinese nationals working for DBN and a subsidiary was shipping the seed to China to be replicated, eliminating the cost of research and development.

Betten said spreadsheets and digital data on computers and storage devices taken in December 2013 from Mo Hailong, a man arrested in Florida, list product identification numbers of stolen seed. Of the six men originally indicted, only Mo Hailong is in custody. The government said the other five remain fugitives.

Mo Hailong, who is under house arrest, is the brother of Mo Yun. She was arrested July 1 in California while on vacation with her two young children for a Disneyland vacation. She was taken into custody at Los Angeles International Airport; her children flew home alone.

Mo Yun, who is married to Shao Genhuo, founder and chief operating officer of DBN whose net worth is estimated at US$1.3 billion, declined to comment.

At Thursday's hearing, her attorney, Terry Bird, pushed for her release on bond. He also asked the judge to permit her to fly back to China in the custody of private security guards to see her children, who “need their mother.”

Bird said the government's allegations are based on misinterpreted instant messages between Mo Yun and her brother.

Assistant U.S. Attorney Jason Griess argued that the charges carry a prison sentence of up to 10 years, and that Mo may want to flee the country to avoid prosecution.

Griess also pointed out that China has no extradition treaty with the United States, so if she's allowed to return home she'll never come back for trial. Trial date has been set for Dec. 1.

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