UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA
v.
DNA PLANT TECHNOLOGY CORPORATION

Criminal No.

Violation:
18 U.S.C. S 371
(Conspiracy)


INFORMATION

The United States hereby informs the Court:

COUNT ONE
(Conspiracy)

At all times relevant to this Information:

1. Defendant DNA Plant Technology Corporation ("DNAP") was, a corporation organized under the lawn of the state of Delaware. DNAP was a biotechnology firm engaged in the development and improvement of various plant species and varieties through the use of advanced breeding and genetic engineering techniques. Until in or about 1994, DNAP's principal place of business was located in Cinnamonson, New Jersey. In or about 1994, DNAP moved its principal place of business to Oakland, California.

2. A co-conspirator* of the defendant, known to the United States, was a corporation engaged in the business of manufacturing cigarettes and other tobacco products for sale in the United States and abroad. Throughout this Information, this corporation will be referred to as "Tobacco Company."

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Factual Background

3. In or about 1983, Tobacco Company entered into a contract with DNAP ("the contract"). Pursuant to the contract, DNAP was to use biotechnology to develop and improve different varieties of tobacco plants for USQ by Tobacco Company. Among the goals specified in that contract we" the [a]lteration of chemical composition of tobacco lines" which "could include production of lines with elevated nicotine content . . . . "

4. In or about April of 1985, the contract was expanded and modified. The "[d]evelopment of commercial high nicotine varieties" of tobacco was listed as the first goal of the expanded contract.

5. From in or about 1983 through in or about 1994, DNAP did in fact, pursuant to the contract, work for Tobacco Company on the breeding, development, and agronomic improvement of various varieties of tobacco that contained elevated levels of nicotine.

6. One variety of flue-cured tobacco that was a subject of the contract had a nicotine level of about 6%, which is about twice the normal nicotine level of flue-cured tobacco Tobacco Company gave this high-nicotine tobacco the code name Y-1 and provided it to DNAP, which worked on Y-1 pursuant to the contract.

7. In or about 1984, Tobacco Company informed DNAP that a good portion of the work on Y-1 tobacco would be done in Brazil, where an affiliate of Tobacco Company was located. (Throughout

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this Information, this affiliate will be referred to as "Brazilian Tobacco Company"). Performing the work in Brazil served several purposes: a) it helped conceal the Y-1 work from competitors of Tobacco Company and other outside parties; b) because the growing season in Brazil takes place during what are the winter months in the U.S., working on the tobacco in both the U.S. and Brazil allowed DNAP and Tobacco Company to grow two crops a year instead of just one and allowed the research to progress more rapidly; and c) because domestic regulations prohibited the commercial growing or such a high-nicotine tobacco variety in the U.S., commercial quantities of Y-1 could only be grown in another country, such as Brazil.

8 Tobacco Company was also interested in exploring other possible locations outside the United States for growing Y-1 tobacco. During the course of the contract, at different times Tobacco Company grew, or attempted to grow, Y-1 in several other countries, including Nicaragua, Honduras, Chile, Nigeria, and Canada.

9. In order to grow Y-1 in Brazil and other countries, it was necessary for DNAP and/or Tobacco Company to get seed for Y-1 into those countries.

10. Until December of 1991, under United States law, it was a crime to export tobacco seed or living tobacco plants outside of the United States, with limited exceptions not relevant here. This law was codified at 7 U.S.C.. S 516 and will be referred to in this Information as the "Tobacco Seed Export law." The

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Tobacco Seed Export law was repealed, effective on or about December 13, 1991.

The conspiracy

11. From in or about 1984, and continuing through in or about July, 1991, the exact dates being unknown to the United States, the defendant DNAP knowingly and willfully combined, conspired, confederated, and agreed with Tobacco Company, Brazilian Tobacco Company, and with officers and employees of DNAP, Tobacco Company, and Brazilian Tobacco Company, known and unknown to the United States, to commit an offense against the United States, that is, to export tobacco seed from the United States to a foreign country, port, or place, without a written permit granted by the Secretary of Agriculture, in violation of the Tobacco Seed Export law, Title 7, United States Code, Section 516.

The Goals of the Conspiracy

12. It was a goal of the conspiracy that Tobacco Company and DNAP would illegally export tobacco seed to Brazil and other countries in order to further the research being conducted under the contract into the growth and improvement of Y-1 and other highnicotine varieties of tobacco.

13. It was further a goal of the conspiracy that Tobacco Company and/or DNAP would illegally export Y-1 seed to other countries, including Nicaragua, Honduras, Chile, Nigeria, Costa

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Rica, Argentina, Zimbabwe and Canada, in order to explore whether or not these were good locations for growing and producing Y-1 tobacco.

14. It was further a goal of the conspiracy that Tobacco Company, by violating the Tobacco Seed Export law in order to grow Y-1 and other high-nicotine tobaccos, would develop a reliable source of supply of high-nicotine tobaccos that Tobacco Company could then use to control and manipulate the nicotine levels in its cigarettes.

15. It was further a goal of the conspiracy that DNAP and Tobacco Company would conceal from the United States and from third parties the fact that tobacco seed was being illegally exported to Brazil and other countries by DNAP and Tobacco Company.

The Manner and Means Used to Further the Goals of the Conspiracy

The conspiracy was accomplished through the following manners and means, among others:

16. DNAP and Tobacco Company illegally smuggled and exported tobacco seed to Brazil and other foreign countries through a variety of methods:

a) DNAP and Tobacco Company, through their employees, packaged Y-1 seed and other tobacco seed and illegally shipped it to Brazil and other countries by air express or courier;

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b) Employees of DNAP and Tobacco Company smuggled seed of Y-1 and other tobacco varieties to Brazil during trips to Brazilian Tobacco Company, by concealing the seed in their luggage or on their person;

c) DNAP and Tobacco Company, through their employees, packaged seed of Y-1 and other tobacco seed and provided it to employees of Brazilian Tobacco Company who were visiting the United States, knowing and intending that these employees would smuggle the seed back to Brazil;

d) DNAP, through its employees packaged seed of Y-1 and other tobacco seed and sent it to Tobacco company, which then would arrange for that seed to be illegally transported to Brazil, Honduras, Chile, Nicaragua, and other countries.

17. At the direction of Tobacco Company, DNAP used "code words" in its internal documents and its reports to Tobacco Company, to conceal the fact that seed was being illegally exported. For example, DNAP would refer to the plantings in Brazil simply as the "winter trials" without mentioning the location, and would refer to seed being sent to Brazil not as seed but as "special material." Tobacco Company also used these terms in its own internal documents and in correspondence with DNAP and Brazilian Tobacco Company.

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18. During the 1994 investigation of the tobacco industry by the United States Food and Drug Administration ("FDA"), DNAP knowingly and willfully concealed information about the contract from the FDA, including the fact that tobacco seed had been illegally exported to Brazil and other countries by DNAP and Tobacco Company.

Overt Acts

19. In furtherance of the conspiracy and to accomplish its goals, defendant DNAP, Tobacco Company, and other co-conspirators committed and caused to be committed the following overt acts, among others.

A. On or about August 13, 1984, an employee of DNAP shipped tobacco seed to an employee of Tobacco Company, to be used for conducting field trials in Brazil.

B. In or about March, 1985, employees of DNAP or Tobacco Company caused a quantity of tobacco seed to be illegally sent to Brazil.

C. On or about July 18, 1987, an employee of DNAP provided Y-1 seed to an employee of Brazilian Tobacco Company, knowing and intending that this employee would and did smuggle that seed back to Brazil.

D. In or about December, 1987, employees of DNAP or Tobacco Company illegally sent five grams of Y-1 seed to Honduras.

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E. In or about July, 1988, an employee of DNAP illegally sent two shipments of tobacco seed, including Y-1 seed, to Brazil.

F. In or about July, 1988, employees of Tobacco Company caused Y-1 seed to be illegally sent to Venezuela, Honduras, Costa Rica, and Zimbabwe.

G. on or about September l, 1988, employees of Tobacco Company illegally sent Y-1 seed to Brazilian Tobacco Company.

H. In or about January, 1989, an employee of DNAP illegally hand-carried Y-1 seed to Canada.

I. In or about July, 1989, an employee of DNAP illegally shipped 13 pounds of Y-1 seed to Brazil.

J. On or about May 22, 1990, an employee of DNAP provided about 12 pounds of Y-1 seed to an employee of Brazilian Tobacco Company, knowing and intending that the employee would and did smuggle the seed back to Brazil.

K. In or about July, 1990, an employee of DNAP provided Y-1 seed to an individual knowing and intending that this individual would and did smuggle that seed to Brazil.

L. On or about July 26, 1990, an employee of Tobacco Company arranged for a courier to deliver Y-1 seed to Brazilian Tobacco Company, and informed DNAP of that fact.

M. On or about June 18, 1991, an employee of Tobacco Company wrote to an employee of Brazilian Tobacco Company to inform him that the Y-1 seed would soon be arriving, stating

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that "[s]pecial materials will be handled as done last year. "

N. On or about July 17, 1991, an employee of DNAP provided Y-1 seed to an employee of Brazilian Tobacco Company who was in the United States, knowing and intending that the employee would and did smuggle that seed back to Brazil. In a cover letter accompanying the seed, the DNAP employee stated: "Enclosed please find the special materials required for the 1991-1992 winter trials."

MARY LOU LEARY
United States Attorney for the District of Columbia

RANDALL D. ELIASON
Assistant U.S. Attorney
D.C. Bar #394411
555 4th St. N.W..
Washington, DC 20001
(202) 514-9832

MARY C. SPEARING
Chief, Fraud Section
Criminal Division
U,S. Department of Justice

BARBARA CORPREW
Deputy Chief, Fraud Section

JIMMYE S. WARREN, DC Bar #430784
KAREN TAYLOR
Senior Trial Attorneys
Fraud Section, Criminal Division
U.S.. Department of Justice
1400 New York Avenue N.W.
Washington, DC 20005
(202) 305-1881

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*Note: Brown & Williamson has admitted it is the unnamed co-conspirator: "We accept that we were party to a technical infringement of a law which was subsequently repealed. It looks like pretty desperate stuff by the department." (Jan. 8, 1998)
--gb



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