DES MOINES, Iowa—The criminal trial of a Chinese executive accused of stealing high-tech U.S. corn seeds is turning into a battle over the federal government’s use of an anti-spying law to fight industrial espionage.
U.S. prosecutors say Mo Hailong, an official with a Chinese agriculture company, participated in a multiyear scheme to pilfer seeds from test fields of U.S. agribusiness giants Monsanto Co. and DuPont Co. The prosecutors claim that Mr. Mo, who was arrested in December 2013 at his home in Boca Raton, Fla., and several alleged accomplices transported seeds back to China, sometimes secreted in boxes of Orville Redenbacher microwave popcorn.
Smuggled seeds were secreted in boxes of Orville Redenbacher popcorn.
Prosecutors have charged Mr. Mo, now under house arrest in Des Moines, Iowa, and six alleged co-conspirators—five of whom remain at large—with stealing trade secrets. Mr. Mo, 45, has pleaded not guilty. The prosecutors say they plan to partly rely on evidence collected through surveillance authorized under the Foreign Intelligence Surveillance Act of 1978 in the trial, which is scheduled for September in Des Moines.
The law was designed to catch foreign government spies and terrorists. Mr. Mo’s case is the first time the U.S. government has said it would use evidence gathered from surveillance authorized under the law to prosecute trade-secret theft charges, legal experts say—although it is possible such evidence has been used in other cases without the government acknowledging it.
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To build their case, Federal Bureau of Investigation agents bugged Mr. Mo’s Honda CR-V and recorded his activities with hidden cameras outside his Florida home, an Illinois farm he operated and a self-storage facility in suburban Chicago where corn seeds were allegedly stored, according to legal documents filed by Mr. Mo’s attorneys. Prosecutors also combed through thousands of emails and computer files.
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After years of combating foreign-based industrial espionage aimed at areas like aviation technology, financial data, and paint formulas, U.S. authorities increasingly are guarding against incursions into the seeds and crop chemicals that helped cement the U.S. as the world’s top exporter of agricultural commodities. Randall Coleman, assistant director of counterintelligence for the FBI, said that U.S. agriculture companies’ expensive research makes them a natural target for corporate espionage.
The Mo case “is not an isolated event,” Mr. Coleman said in a recent interview. Agricultural espionage, he said, is “a serious problem.”
The alleged seed theft surfaced after a DuPont official in 2011 spotted a man on his knees in the dirt, digging in an Iowa research field while a colleague waited in a nearby vehicle, according to authorities. When confronted, the man—who authorities allege was Mr. Mo—offered a hasty explanation before retreating to the vehicle and speeding off, U.S. officials said.
The bizarre encounter near Tama, Iowa, sparked a 2½ year investigation, with agents monitoring the defendants as they spent days cruising among corn fields, bickered over tactics and devised ways to ship seed to China, according to documents filed by prosecutors. The prosecutors allege the conspirators discussed buying farmland to plant seeds and identify genetically pure specimens. The prosecutors also claim the men stored and sorted corn in a suburban Chicago storage locker before Mr. Mo was arrested 16 months ago at his Boca Raton home and other defendants went unapprehended.
In 2012, U.S. customs authorities searched the luggage of Ye Jian—one of the five alleged co-conspirators still at large—on a Beijing-bound flight and found corn seeds hidden in two boxes of Orville Redenbacher microwave popcorn.
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