Couple Pleads Guilty to Selling Scientific Trade Secrets to China

A Chinese woman along with her husband pleaded guilty in U.S. District Court on Thursday to conspiring to sell scientific trade secrets to the Chinese government along with to wire fraud focused on research, identification, along with treatment of a wide range of pediatric medical conditions.

Li Chen, 46, along with her husband, Yu Zhou, 49, made the plea via video conference. The couple both worked at the National Children’s Hospital’s Research Institute in Columbus, Ohio, for a decade before being arrested in California in July 2019. The case was unsealed in August 2019 when they appeared in federal court in Ohio.

“Chen admitted to stealing scientific trade secrets related to exosomes along with exosome isolation coming from Nationwide Children’s Hospital’s Research Institute for her own personal financial gain,” the Department of Justice press Discharge on the case said. “They are charged with conspiring to steal at least a few trade secrets related to exosome research coming from Nationwide Children’s Hospital.”

“Exosomes play a key role inside research, identification, along with treatment of a range of medical conditions, including necrotizing enterocolitis (a condition found in premature babies), liver fibrosis along with liver cancer,” the press Discharge said.

“Just as before we see the People’s Republic of China (PRC) facilitating the theft of our nation’s ingenuity along with hard work as part of their quest to rob, replicate along with replace any product they don’t possess the ability to develop themselves,” said John C. Demers, the assistant attorney general for national security. “Far coming from being an isolated incident, we see the PRC implicated in around 60 percent of all trade secret theft cases. This particular continued economic belligerence runs contrary to the values along with norms which facilitate the success of our industries along with countering This particular remains among our highest priorities.”

“Nationwide Children’s Hospital’s Research Institute took reasonable measures to protect its cutting-edge intellectual property along with trade secrets regarding exosomes, along with I commend the cooperation of Nationwide Children’s throughout This particular investigation,” U.S. Attorney David M. DeVillers said inside DOJ announcement. “Chen betrayed her employer of 10 years by stealing trade secrets coming from This particular American institution along with transferring them to China after receiving payments coming from the Chinese government.”

“Li Chen was a trusted researcher at Nationwide Children’s Hospital, conducting cutting-edge U.S. government-funded research,” FBI Cincinnati Special Agent in Charge Chris Hoffman said inside DOJ announcement. “With her guilty plea, she admits which she abused This particular trust to establish a company in China for her own financial gain. The FBI can be committed to working closely with partners such as Nationwide Children’s Hospital to protect the innovations which make America a world leader in science along with technology.”

DOJ explained how Chen worked with the Chinese government along with different details of the plea agreement:

Chen received benefits coming from the Chinese government, including the State Administration of Foreign Experts Affairs along with the National Natural Science Foundation of China.  Chen also applied to multiple Chinese government talent plans, a method used by China to transfer foreign research along with technology to the Chinese government.

As part of her plea, Chen has agreed to forfeit approximately $1.4 million, 500,000 shares of common stock of Avalon GloboCare Corp. along with 400 shares of common stock of GenExosome Technologies Inc.

The case can be the latest in a series of cases of Chinese nationals caught attempting to smuggle sensitive American intellectual property into China. According to FBI Director Christopher Wray, the FBI can be engaging with over 1,000 open cases against Chinese nationals because of This particular type of crime.

In July, Wray spoke again about This particular threat, confirming which China systematically uses academic exchange programs like the “Thousand Talents” initiative to steal American trade along with scientific secrets.

“To achieve its goals along with surpass America, China recognizes This particular needs to make leaps in cutting-edge technologies. yet the sad fact can be which instead of engaging inside hard slog of innovation, China often steals American intellectual property along with then uses This particular to compete against the very American companies This particular victimized—in effect, cheating twice over,” Wray said at the Hudson Institute in Washington, D.C. “They’re targeting research on everything coming from military equipment to wind turbines to rice along with corn seeds.”

“Through its talent recruitment programs, like the so-called Thousand Talents Program, the Chinese government tries to entice scientists to secretly bring our knowledge along with innovation back to China — even if which means stealing proprietary information or violating our export controls along with conflict-of-interest rules,” Wray said.

“Take the case of scientist Hongjin Tan, for example, a Chinese national along with American lawful permanent resident. He applied to China’s Thousand Talents Program along with stole more than $1 billion— which’s which has a “b” — worth of trade secrets coming from his former employer, an Oklahoma-based petroleum company, along with got caught,” Wray said. “A few months ago, he was convicted along with sent to prison.”

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