The Chinese national who operated the secret illegal Reedley biolab has been found guilty of all charges federal prosecutors brought against him.
A federal jury in Sacramento found Jia Bei Zhu, 64, guilty after a two-week trial which exposed how he fraudulently sold COVID-19 test kits and lied to the U.S. Food and Drug Administration (FDA).
The backstory: Four years ago a Reedley code enforcement officer noticed an improper garden hose connected to a warehouse, leading to the discovery of various biological materials inside.
- Officials discovered pathogens such as malaria, chlamydia and E. Coli, among other bacterial and viral agents, as well as COVID-19 test kits, pregnancy test kits, blood and more than 900 genetically engineered mice.
- Soon after, federal officers arrested Zhu, who also goes by the alias David He, for operating the warehouse.
Driving the news: Evidence presented at trial showed that Zhu founded biomedical company Universal Meditech Inc. (UMI) with Zhaoyan Wang. He hired inexperienced employees, such as cellphone salespeople, supermarket workers, childcare workers and stay-at-home parents, before starting UMI. Some of those employees were hired through the Fresno County Economic Development Corporation.
- Zhu, Wang and others at UMI conspired to import faulty COVID-19 tests from China and sell them to customers from August 2020 through March 2023. They made false representations that the tests were authorized by the FDA, were made in the United States, were made in connection with a certified medical lab and actually worked.
- Employees who testified at the trial explained how Zhu told them to make false representations to customers. They said they were afraid Zhu would fire them and would also physically hurt them if they did not follow his orders.
- Victims also testified at the trial, explaining how the tests they received from UMI were missing basic parts and could not detect COVID-19.
- The trial showed how Zhu’s scheme was first exposed in 2022 when a victim filed a civil lawsuit against UMI, leading to a court-ordered inspection of UMI’s initial facility in Fresno. The inspection showed the facility to simply be an unsanitary warehouse, not a biological facility.
- Zhu then moved the facility to Reedley and changed the name of UMI to Prestige Biotech Inc. (PBI), yet the FDA continued investigating him.
The big picture: Overall, Zhu sold more than one million COVID-19 tests for nearly $4 million.
- Zhu has been convicted of one count of conspiracy to commit wire fraud, eight counts of substantive wire fraud, two counts of distributing adulterated and misbranded medical devices and one count of making a false statement to the FDA.
- Wang is Zhu’s romantic partner and was also charged in the case, yet she fled the United States shortly before he was arrested and remains a fugitive in China.
- The U.S. Department of Justice also announced along with Zhu’s guilty verdict that the FDA, the Centers for Disease Control and Prevention and the FBI determined that the pathogens at the Reedley warehouse were part of a failed effort to manufacture COVID-19 tests and did not pose any risk to the public.
What they’re saying: “This verdict holds the defendant accountable for actions that exploited a public health crisis for his own gain. He flouted the lawful authority of the FDA and deliberately deceived the public by repackaging low-quality, foreign-made test kits at a time when accuracy and reliability were critical,” said U.S. Attorney Eric Grant. “This conduct, tied to the unlawful operations uncovered at the Reedley laboratory, put lives at risk. Our office remains committed to prosecuting those who endanger the public through fraud, especially in matters affecting the health and safety of our communities.”
- Special Agent in Charge Robert Iwanicki, FDA Office of Criminal Investigations, Los Angeles Field Office, said Zhu’s actions undermined public health during a critical time.
- “The FDA works closely with our law enforcement partners to investigate violations of the Federal Food, Drug, and Cosmetic Act, which is designed to ensure, among other things, that medical devices are safe and effective,” Iwanicki said. “We will continue to investigate and bring to justice those who threaten the health of consumers by evading FDA requirements.”
- FBI Sacramento Special Agent in Charge Sid Patel added, “Mr. Zhu saw a public health crisis and chose to profit from it by misrepresenting the origin, quality, and FDA approval status of his tests with the intent to flood the market with misbranded medical devices. This verdict is the result of diligent investigative work, the courage and cooperation of the witnesses, and our strong partnership with the FDA. The FBI is committed to safeguarding the integrity of the medical supply chain that Americans depend on.”
What we’re watching: Zhu will be sentenced by U.S. District Judge Dale Drozd on Aug 24.
- He faces 20 years in prison for the conspiracy charge and each of the wire fraud charges, three years in prison for each of the distribution of adulterated and misbranded medical device charges and five years in prison for the false statements charge.
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