Grand jury indicts 2 in rice conspiracy

Trade secrets stolen, authorities say

Saturday, December 21, 2013

A Stuttgart rice scientist who was arrested last week and detained by a federal judge in Little Rock until he could be transported to a Kansas court this week has been indicted by a federal grand jury in Kansas on accusations of stealing trade secrets from a biotechnology company to sell to associates in China.

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An 11-page indictment handed up Wednesday in U.S. District Court for the District of Kansas charges both Wengui Yan, 63, who is on administrative leave from his job as a research geneticist at the U.S. Department of Agriculture’s Dale Bumpers National Rice Research Center in Stuttgart, and Weiqiang Zhang, a Kansas man who worked as a rice breeder at Ventria Bioscience in Junction City, Kan., with conspiracy to steal trade secrets and theft of trade secrets.

If convicted, the men face up to 10 years in prison and a fine of up to $250,000 on each count, under federal statutes.

The indictment states that Ventria sold and shipped recombinant proteins developed and processed through particular rice seeds in interstate and foreign commerce. A May 2012 online edition of Natural News described the genetically modified rice product being grown in Junction City as “Frankenrice,” saying it was modified with genes from the human liver for use in pharmaceuticals.

When Ventria sought a permit several years go to grow nonfood rice bioengineered to contain human proteins, the USA Rice Federation asked the USDA to reject the request. The federation issued a news release warning that if the rice “were to escape into the commercial rice supply, the financial devastation to the U.S. rice industry would likely be absolute.”

It added, “There is no tolerance, either regulatory or in public perception, for a human gene-based pharmaceutical to end up in the world’s food supply.”

In a criminal complaint used to hold the men in federal custody until they could be indicted, investigators said that Ventria invested $75 million into the technology that made the seeds’ design and production possible.

The indictment alleges that Yan and Zhang went to China in August 2012 to offer expertise at a crops research institute, then invited people at the institute to the U.S. this summer. On Aug. 7, U.S. Customs and Border Protection officials found the restricted-access seeds in the luggage of members of the Chinese delegation, the U.S. attorney’s office announced last week. It said some of the seeds were wrapped in a July 23 copy of the Arkansas Democrat-Gazette.

The indictment accuses the men of conspiring together since October 2010 to convert a trade secret to the economic benefit of someone other than Ventria, “such trade secret being Ventria Bioscience’s methods of developing, propagating, growing, cultivating, harvesting, cleaning and storing particular rice seeds for cost-effectively producing recombinant proteins from such seeds.”

In Yan’s detention hearing last week in Little Rock, an FBI agent testified that Yan, who has lived in Stuttgart for 17 years and been a naturalized U.S. citizen for 13 years, had been recently looking for a job in China, according to his emails, which the FBI intercepted.

Yan’s court-appointed attorney told the judge that Yan was simply trying to help his wife, a native of China whom he married in 1982, because she was depressed and homesick.

Arkansas, Pages 9 on 12/21/2013