A federal jury has found a California man tied to a controversial underground biolab guilty of orchestrating a multimillion-dollar COVID-19 test fraud scheme, prosecutors said.
Jia Bei Zhu, 64, a Chinese national, was convicted on all 12 counts following a two-week trial in Sacramento, including conspiracy, wire fraud, distributing misbranded medical devices 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), to sell more than one million faulty COVID-19 test kits across the United States, raking in nearly $4 million at the height of the pandemic.
"This verdict holds the defendant accountable for actions that exploited a public health crisis for his own gain," U.S. Attorney Eric Grant said in a statement. "He … deliberately deceived the public by repackaging low-quality, foreign-made test kits at a time when accuracy and reliability were critical."
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Authorities say the tests were falsely marketed as FDA-approved, made in the USA and produced in certified laboratories - claims that prosecutors say were entirely fabricated.
According to evidence presented at trial, Zhu and his associates imported cheap COVID-19 tests from China, then repackaged and resold them under false pretenses. Many of the kits were missing basic components and, in some cases, did not work at all, victims testified.
Employees told jurors they were instructed to lie to customers and feared retaliation if they refused. Many of those workers had no medical or scientific background and were recruited from unrelated jobs, including retail and childcare.
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Federal investigators say the operation was driven by deception at nearly every level, from misleading online marketing to false claims made directly to regulators.
"The defendant's scheme … undermined public health during a critical time," said FDA Special Agent in Charge Robert Iwanicki.
Zhu had previously drawn national scrutiny over his connection to a now-shuttered warehouse in Reedley, California, described by officials as an illegal, makeshift biolab that raised alarms about potential biohazards.
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The Reedley facility previously drew scrutiny after local and federal officials found lab materials, mice and improperly stored substances, though officials later said the materials tied to this case did not pose a risk to humans.
However, authorities emphasized that the criminal charges in this case were not directly tied to the biological materials found at that site. Federal agencies, including the FDA, CDC and FBI, ultimately determined the materials were part of a failed attempt to manufacture COVID-19 tests and did not pose a threat to the public.
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Prosecutors said UMI's Fresno facility itself lacked the ability to manufacture COVID-19 tests and was described as an unsanitary warehouse that fell far below established standards.
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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 say the pair attempted to dodge scrutiny by relocating their operation and rebranding the company under a new name, but the effort failed as federal investigators closed in.
In one instance, Zhu allegedly lied to federal agents about his identity, claiming to be a different person who had recently arrived in the U.S.
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Zhu is scheduled to be sentenced in August and faces decades in prison if given the maximum penalties. Each wire fraud charge alone carries up to 20 years.
Federal officials say the case underscores their commitment to cracking down on pandemic-related fraud.
"Our office remains committed to prosecuting those who endanger the public through fraud," Grant said.
Fox News' Lee Ross and Bradford Betz contributed to this report.
