Chinese National’s Seed Theft in Iowa Exposes Vulnerability

File photo of a U.S. and Iowa state flag are seen next to a corn field in Grand Mound, IOWA

ARLINGTON, Iowa (Reuters) – Tim Burrack, a northern Iowa farmer in his 44th growing season, has taken to keeping a wary eye out for unfamiliar vehicles around his 300 acres of genetically modified corn seeds.

Along with other farmers in this vast agricultural region, he has upped his vigilance ever since Mo Hailong and six other Chinese nationals were accused by U.S. authorities in 2013 of digging up seeds from Iowa farms and planning to send them back to China.

The case, in which Mo pleaded guilty in January, has laid bare the value — and vulnerability — of advanced food technology in a world with 7 billion mouths to feed, 1.36 billion of them Chinese.

Citing that case and others as evidence of a growing economic and national security threat to America’s farm sector, U.S. law enforcement officials are urging agriculture executives and security officers to increase their vigilance and report any suspicious activity.

But on a March 30 visit to Iowa, Justice Department officials could offer little advice to ensure against similar thefts, underlining how agricultural technology lying in open fields can be more vulnerable than a computer network or a factory floor.

“It may range down to traditional barriers like a fence and doing human patrols to making sure you get good visuals on what’s occurring,” Assistant Attorney General John Carlin, head of the Justice Department’s national security division, said when touring Iowa State University.

But agriculture sector executives say fences and guards are not feasible, due to the high cost and impracticality of guarding hundreds of thousands of acres.

Tom McBride, intellectual property attorney at Monsanto — one of the firms whose seeds were targeted by Mo — said it safeguards its genetically modified organism (GMO) technology by protecting its computers, patenting seeds and keeping fields like Burrack’s unmarked. Monsanto says it is not considering physical barriers like fences or guards.

The FBI and the U.S. Justice Department say cases of espionage in the agriculture sector have been growing since Mo was first discovered digging in an Iowan field in May 2011. Over the past two years, U.S. companies, government research facilities and universities have all been targeted, according to the FBI.

Although prosecutors were unable to establish a Chinese government link to Mo’s group, the case adds to U.S.-China frictions over what Washington says is increasing economic espionage and trade secret theft by Beijing and its proxies.

A U.S. law enforcement official told Reuters the agency looked for a connection between the Chinese government and the conspiracy carried out by Mo.

“In cases like this, we can see connections, but proving to the threshold needed in court requires that we have documents that the government has directed this,” the official said. “It’s almost impossible to get.”

A Chinese embassy spokesman in Washington, Zhu Haiquan, said he did not have detailed information on the Mo case but that China “stands firm” on the protection of intellectual property and maintains “constant communication and cooperation” with the U.S. government on the issue.

On his visit to Washington last September, President Xi Jinping reiterated China’s denial of any government role in the hacking of U.S. corporate secrets.

Mo, an employee of Chinese firm Kings Nower Seed, pleaded guilty to stealing seed grown by U.S. firms Monsanto, Dupont Pioneer and LG Seeds.

Prosecutors say he specifically targeted fields that grow the parent seeds needed to replicate GMO corn. The FBI says it suspects he was given the location by workers for the seed companies, but did not charge any employees.

DuPont Pioneer and LG Seeds declined to comment for this story.

Mo, whose case was prosecuted by the Justice Department as a national security matter rather than a simple criminal case, now faces a sentence of up to five years in prison. Five others charged in the case are still wanted by the FBI and are believed to have fled to China or Argentina. Charges were dropped against a sixth Chinese suspect.

NATIONAL SECURITY

The number of international economic espionage cases referred to the FBI is rising, up 15 percent each year between 2009 and 2014 and up 53 percent in 2015. The majority of cases reported involve Chinese nationals, the U.S. law enforcement official told Reuters. In the agriculture sector, organic insecticide, irrigation equipment and rice, along with corn, are all suspected to have been targeted, including by Chinese nationals, the official said.

Mo Hongjian, vice president of Kings Nower Seed’s parent company, Beijing Dabeinong Technology Group, declined to comment on the case or on the company’s connection with the Chinese government.

The parent firm is privately owned, but says it receives government money for research in “science and technology.”

China bans commercial growing of GMO grains due to public opposition to the technology and imports of GMO corn have to be approved by the agriculture ministry. Still, President Xi called in 2014 for China to innovate and dominate the technique, which promises high yields through resistance to drought, pests and disease.

In January, a Greenpeace report found some Chinese farmers are illegally growing GMO corn whose strains belong to companies including Monsanto, Syngenta and DuPont Pioneer.

Monsanto, which supplies Burrack’s seed, said it can block foreign groups who request to tour their lab and learning center in Huxley, Iowa. For the past few years, Monsanto says it has run its own background checks on Chinese delegations that ask for a tour, and, if they are approved, boosts security to be sure they do not steal anything or take pictures.

In Washington, U.S. senators have called for a review of the $43 billion deal by state-owned ChemChina to buy Swiss seed group Syngenta, which generates nearly a quarter of its revenue from North America.

Acquiring GMO seed and successfully recreating a corn plant would allow Chinese companies to skip over roughly eight years of research and $1.5 billion spent annually by Monsanto to develop the corn, the company says.

Burrack’s farm itself was not targeted by Mo, though he grows the Monsanto parent seed that the Chinese national was digging for. Burrack grows the corn in two fields in front of and behind his house where he can watch them, a small part of his 2,800-acre farm.

He said he is told by Monsanto where and when to plant the parent seed, but has never been told to keep what he is planting a secret.

“What no one seems to understand is that they’re stealing from people like me,” Burrack said. “They’re stealing the research that farmers pay for when they buy Monsanto seed.”

(Reporting by Julia Edwards; Additional reporting by Shuping Niu in Beijing; Editing by Kevin Drawbaugh and Stuart Grudgings)

Trail in cyber heist suggests hackers were Chinese: senator

Bangladesh central bank

By Karen Lema

MANILA (Reuters) – A Philippine senator said on Wednesday that Chinese hackers were likely to have pulled off one of the world’s biggest cyber heists at the Bangladesh central bank, citing the network of Chinese people involved in the routing of the stolen funds through Manila.

Unidentified hackers infiltrated the computers at Bangladesh Bank in early February and tried to transfer a total of $951 million from its account at the Federal Reserve Bank of New York.

All but one of the 35 attempted transfers were to the Rizal Commercial Banking Corp (RCBC), confirming the Philippines’ centrality to the heist.

Most transfers were blocked, but a total of $81 million went to four accounts at a single RCBC branch in Manila. The stolen money was swiftly transferred to a foreign exchange broker and distributed to casinos and gambling agents in Manila.

“The hacking was done, chances are, by Chinese hackers,” Senator Ralph Recto told Reuters in a telephone interview. “Then they saw that, in the Philippines, RCBC particularly was vulnerable and sent the money over here.”

Beijing was quick to denounce the comments by Recto, vice chairman of the Senate Committee on Finance and a former head of the Philippines’ economic planning agency.

The suggestion that Chinese hackers were possibly involved was “complete nonsense” and “really irresponsible,” Chinese foreign ministry spokesman Lu Kang told reporters.

Recto said he couldn’t prove the hackers were Chinese, but was merely “connecting the dots” after a series of Senate hearings into the scandal.

At one hearing, a Chinese casino boss and junket operator called Kim Wong named two high-rolling gamblers from Beijing and Macau who he said had brought the stolen money into the Philippines. He displayed purported copies of their passports, showing they were mainland Chinese and Macau administrative region nationals respectively.

“BEST LEAD”

Wong, a native of Hong Kong who holds a Chinese passport, received almost $35 million of the stolen funds through his company and a foreign exchange broker.

The two Chinese named by Wong “are the best lead to determine who are the hackers,” said Recto. “Chances are… they must be Chinese.”

The whereabouts of the two high-rollers were unknown, Recto added, saying the Senate inquiry “may” seek help from the Chinese government to find them.

Recto also questioned the role of casino junket operators in the Philippines, saying many of them have links in Macau, the southern Chinese territory that is the world’s biggest casino hub. “There are junket operators who are from Macau, so it (the money) may find its way back to Macau,” he said.

A senior executive at a top junket operator in Macau told Reuters there was “no reason” to bring funds from the Philippines to Macau.

“This seems more like a political story in the Philippines,” he said, speaking anonymously because he was not authorized to talk to the media.

The U.S. State Department said in a report last month that the gaming industry was “a weak link” in the Philippines’ anti-money laundering regime.

Philrem, the foreign exchange agent, said it distributed the stolen $81 million to Bloomberry Resorts Corp, which owns and operates the upmarket Solaire casino in Manila; to Eastern Hawaii Leisure Company, which is owned by Wong; and to an ethnic Chinese man believed to be a junket operator in Manila.

Wong has returned $5.5 million to the Philippines’ anti-money laundering agency and has promised to hand over another $9.7 million. A portion of the money he received, he said, has already been spent on gambling chips for clients.

Solaire has told the Senate hearing that the $29 million that ended up with them was credited to an account of the Macau-based high-roller but it has managed to seize and confiscate $2.33 million in chips and cash.

(Writing by Andrew R.C. Marshall; Additional reporting by Farah Master in Hong Kong; Editing by Raju Gopalakrishnan)

Slain American Missionary Celebrated

An elderly American missionary stabbed to death in Haiti last week has been remembered as a champion of those in need and a tireless worker for spreading the truth and love of Jesus Christ.

George Knoop, 77, a former Chicago area teacher before becoming a missionary to Haiti, was attacked inside his home in the Haitian capital May 13th.  Friends say that Knoop was able to make a cell phone call after the attack but was unable to speak; by the time they reached the home he was dead.

Officials say they have no suspects in the murder.  Investigators say the incident was likely a crime of opportunity as a computer was stolen from the home and the murder weapon was a knife that had been in the home.

“I studied the Bible with him and he helped me a lot,” Charles Ronald said at the memorial.  “He was generous, helping people, paying for their school, their rents, their food.”

Pastor Larry McCarthy of Moody Church Chicago, who was Knoop’s pastor, said that when the retiree moved to Haiti he sold his home, his TV, his car and his clothes so he could spend everything helping the people of Haiti recover from the devastating 2010 earthquake that left more than 200,000 people dead.

Teenagers Arrested For Central Park Assaults

Five children under 16 have been arrested by the NYPD after a mugging spree in New York’s Central Park.

The five children, including a 12-year-old and 13-year-old, are facing charges of robbery, assault and attempted assault.

The gang attacked a 31-year-old man on Monday morning, beating him with a stick and punching him in the face when he refused to give them all the money in his wallet.  The group then attacked two female joggers and stole their iPhones and iPods.

The only suspect named by police was 16-year-old Angel Munoz.  Police say that Munoz and one of the 14-year-old assailants turned themselves in to police after discovering they were the subject of a manhunt.

The victims then identified the other suspects from lineups conducted at an NYPD precinct.

Romania Focus Of Data Breach Investigation

Investigators looking into the massive data breach at Target and Neiman Marcus stores originated in Romania.

The total of customers whose personal data was stolen in a hacking attack on retail card machines continues to climb.  The latest reports now put the total over 110,000 potential victims of the hacking attack.

The FBI and U.S. Secret Service officials say that over the last year they have been involved with numerous arrests in Romania connected to hacking attacks on U.S. computers.  The rise of cybercrime has been so significant that the Council of Europe has opened an office in Romania’s capital focused on cybercrime.

The U.S. Embassy in Romania said that 80% of cyber attacks from Romania focus on American citizens.  They estimate $1 billion a year is stolen by Romanian hackers.

Over 100 Arrested In Social Security Scam

Arrests are being carried out in over 10 states as part of an investigation into a massive Social Security fraud scheme.

The joint federal and state investigation alleges that over $24 million has been dispersed in fraudulent disability payments. At least 102 of the people being arrested are beneficiaries that claimed to be unable to work a job or leave their home but were witnessed leading very active lives.

In addition, lawyers, disability consultants, and recruiters are facing multiple charges for their parts in the scheme including coaching people to defraud the government.

A source told the Wall Street Journal a number of former NYPD and NYFD members will be arrested as part of the fraud.

The Social Security Administration has been focusing on fraud under pressure from Congress to tighten up the disability process. Six months ago, investigators arrested 70 people from Puerto Rico on similar charges.

Identity Thieves Strike Target Stores

The weekend after Thanksgiving was big for more than just most of the nation’s retailers.

Retail chain Target reportedly was hit by a massive identity theft attack where as many as 40 million credit and debit card accounts could have had their information taken by hackers.

Target released a statement saying that customers who used credit or debit cards between November 27th and December 15th could have compromised accounts.  Information stolen included customer names, credit and debit card numbers, expiration dates and even the three digit security code included on the back of the card.

Target did not release information about how the hackers cracked their system which reportedly included installing software on card readers.  The company assured customers the problem has been fixed.

The U.S. Secret Service is investigating the theft because it involves currency transactions.

Man Faces Life For Defrauding Navy Veterans

A man convicted of masterminding a $100 million fraud involving Navy veterans could be spending the rest of his life in prison.

John Donald Cody, 67, is a Harvard-trained attorney who was convicted of racketeering, theft, money laundering and 12 counts of identity theft in connection with his looting of the United States Navy Veterans Association.

Cody defrauded veterans and supporters in 41 states but Ohio took the lead in prosecuting him. He was arrested after spending two years on the run after hiding out in Portland, Oregon. Only a small amount of the $100 million was found.

The Ohio state attorney general’s office, which handled the prosecution, is asking the judge to sentence Cody to 41 years in prison and a fine of $6.3 million.

Cody’s defense team is calling for a new trial saying that their legal defense was ineffective because of limited preparation time and their client’s erratic behavior and cooperation.