A Chinese-American couple at a U.S. children’s hospital was convicted Monday, Feb. 1, of stealing commercial research secrets from their hospital’s laboratory and committing wire fraud. The wife, Li Chen, was sentenced to 2 1/2 years in prison and the husband, Yu Zhou, is awaiting sentencing in Columbus, Ohio, District Court.
Li Chen, 47, and Yu Zhou, 50, were former fellows at Nationwide Children’s Hospital in Columbus, Ohio. They worked in separate medical research laboratories at the hospital for 10 years (Zhou Yu: 2007-2017, Chen Li: 2008-2018).
During their employment, they conspired to steal at least five trade secrets related to exosome research from the National Children’s Hospital, and in 2015, without the hospital’s knowledge, they established “Beijing Genexosome” (Beijing Genexosome) in China to sell the stolen trade secrets. In 2017, they sold the company to Avalon GloboCare, a Nasdaq-listed company, for a profit of nearly $1.4 million.
As of 2019, the company’s website also advertises multiple product and service offerings related to exosome extraction technology, including a suite of IP-protected products developed by a laboratory affiliated with Nationwide Children’s Hospital in Columbus, Ohio.
In addition, Chen Li has applied for multiple overseas talent programs used by the Chinese Communist government to obtain foreign research and technology transfer, receiving direct benefits from the Chinese Communist government, including the State Administration of Foreign Experts Affairs and the National Natural Science Foundation.
The couple engaged in the theft of trade secrets related to exosomes used to research, identify and treat a range of pediatric diseases, including necrotizing enterocolitis (a disease found in premature infants), liver fibrosis and liver cancer, according to the official website of the federal Department of Justice.
The couple was arrested in California in July 2019. A year later, Chen Li pleaded guilty. on Feb. 1, 2021, Chen Li was sentenced to 2 1/2 years in prison, along with the forfeiture of 500,000 shares of Avalon GloboCare Corp and 400 shares of GenExosome Technologies Inc. worth approximately $1.4 million. She is also required to pay $2.6 million in restitution. Her husband, Yu Zhou, who was a co-conspirator, is awaiting sentencing.
The Assistant Attorney General (John Demers) of the U.S. Department of Justice’s National Security Division said this is by no means an isolated incident. China (Communist Party of China) has long rewarded (in the U.S.) researchers for stealing U.S. talent and hard work by grabbing, copying and replacing any products they were not capable of developing on their own, and is now implicated in about 60 percent of trade secret theft cases. “This runs counter to the values and norms that promote the success of American industry, and addressing these issues is our highest priority.”
Demers added that programs such as the Chinese Communist Party‘s “Thousand Talents Program,” are harmful platforms for academic collaboration, and hopes that the case of Chen Li and her husband “serves as a warning to all those who seek to work illegally and profitably through theft and to achieve technological advantage for the Chinese Communist Party.”
Chen Li and her husband voluntarily participated in a long-term effort by the Chinese government to steal U.S. intellectual property, said David DeVillers, U.S. attorney for the Southern District of Ohio. They stole and profited from U.S. research over a period of several years. “She should also spend some Time in federal prison.”
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