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A jury has found a California man imprisoned in a controversial underground facility guilty of masterminding a multimillion-dollar COVID-19 fraud scheme, prosecutors said.
Jia Bei Zhu, 64, of Chinese descent, was convicted of 12 counts following a two-week trial in Sacramento, including conspiracy, wire fraud, distribution of counterfeit medical supplies and lying to the Food and Drug Administration, according to the U.S. Attorney’s Office.
Prosecutors say Zhu used his Fresno-based company, Universal Meditech Inc. (UMI), selling more than a million defective COVID-19 test kits across the United States, and making nearly $4 million in revenue during the pandemic.
“This decision holds the defendant accountable for actions that exploited a public health crisis for personal gain,” said US Attorney Eric Grant in a statement. “He deliberately misled the public by repackaging low-quality, foreign-made test kits at a time when accuracy and reliability were critical.”
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Additional charges have been filed against Jia Bei Zhu, 62, who works for Reedley Bio-Lab, and his colleagues, according to the Department of Justice. (MPH)
Authorities say the tests were falsely marketed as approved by the FDA, made in the USA and produced in certified laboratories – claims that prosecutors say are completely fabricated.
According to evidence presented at trial, Zhu and his colleagues imported cheap COVID-19 tests from China, then repackaged and resold them under false pretenses. Many of the kits were missing basic items and, in some cases, didn’t work at all, victims testified.
Employees told the jury they were told to lie to customers and feared retaliation if they refused. Many of those workers had no medical or scientific background and were employed in unrelated jobs, including retail and childcare.
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Federal investigators say the operation is driven by deception at nearly every level, from misleading online advertising to false claims made directly to regulators.
“The defendant’s plan … undermines public health at a critical time,” said FDA Special Agent in Charge Robert Iwanicki.
Zhu had been under national investigation for his connection to a now-shuttered warehouse in Reedley, California, described by officials as an illegal, makeshift biolab that raised warnings about potential dangers.
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Inside the Chinese-linked biolab in Reedley, California, where the leak is. (MPH)
The Reedley facility previously came under scrutiny after local and state officials found lab supplies, mice and improperly stored materials, though officials later said the materials seized in the case did not pose a risk to people.
However, the authorities emphasized that the criminal charges in this case were not directly linked to the organisms found in the area. Federal agencies, including the FDA, CDC and FBI, ultimately determined that the materials were part of a failed attempt to conduct tests for COVID-19 and did not pose a threat to the public.
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Prosecutors said the UMI Fresno facility itself lacked the capacity to conduct COVID-19 tests and was described as an unsanitary warehouse that fell below established standards.
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Lab equipment with Mandarin text is seen in a biolab located in Fresno, Calif. (MPH)
Zhu’s alleged romantic and business partner, Zhaoyan Wang, was also charged but fled the United States before his arrest and remains a fugitive believed to be in China.
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Prosecutors said the couple tried to avoid scrutiny by decommissioning their operations and rebranding the company under a new name, but the efforts failed as federal investigators closed in.
In one incident, Zhu is said to have lied to federal agents about his identity, saying he was another person who had recently arrived in the US.
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Zhu is scheduled to be sentenced in August and faces decades in prison if given the maximum sentences. The payoff for wire fraud alone takes 20 years.
Federal officials say the case underscores their commitment to ending pandemic-related fraud.
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“Our office remains committed to prosecuting those who endanger the public through fraud,” said Grant.
Fox News’ Lee Ross and Bradford Betz contributed to this report.
