Plant Company Pleads Guilty

FOR IMMEDIATE RELEASE
FRIDAY, JANUARY 23, 1998

PLANT COMPANY PLEADS GUILTY IN TOBACCO FRAUD INVESTIGATION
WASHINGTON, D.C.--DNA Plant Technology Corporation (DNAP) pleaded guilty today to one misdemeanor count of conspiracy to violate the Tobacco Seed Export law, the Department of Justice announced. Sentencing was set for a later date.

The plea is the first criminal conviction in the Department's continuing investigation of the tobacco industry. As part of its plea agreement, DNAP agreed to cooperate with the government's investigation.

The Department's Fraud Section and the U. S. Attorney's office for the District of Columbia said DNAP pleaded guilty before Chief Judge Norma Holloway Johnson to a criminal information filed in U.S. District Court for the District of Columbia charging it with conspiring to send tobacco seed to several foreign countries without a federal permit (18 U.S.C., Sec. 371).

DNAP, based in Oakland, California, is a biotechnology company that develops and improves various plant varieties through genetic engineering and advanced breeding technique".

According to the information, DNAP entered into a contract in 1983 with a United States tobacco company (which, as an unindicted co-conspirator, the government declined to name as a matter of policy), to grow and improve high-nicotine lines of tobacco.

The information charged that DNAP conspired with the tobacco company and its Brazilian affiliate to violate a law that prohibited the export of tobacco seed from the United States without a permit. It charged that employees of DNAP and the tobacco companies, from 1984 through 1991, conspired to illegally export tobacco seeds to Brazil and a number of other countries to develop tobacco with a high nicotine content The law prohibiting such exports was repealed in 1991.

The government said employees of DNAP and the tobacco company illegally shipped the seed by air express or courier and hid it on themselves to smuggle into Brazil while traveling.

One of the tobacco company's goals, said the information, was to develop a reliable source of high-nicotine tobaccos that could be used to control and manipulate the nicotine levels in the company's cigarettes. The government also charged that during an investigation of the tobacco industry by the Food and Drug Administration in 1994, DNAP knowingly concealed from the FDA information about its contract with the tobacco company and the export of tobacco seeds.

The maximum penalty for the misdemeanor violation is a fine of $200,000 or twice the pecuniary gain to DNAP under the contract.

The Justice Department praised the work of the Federal Bureau of Investigation (FBI) squad dealing with the tobacco investigation.

 

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