An Ohio man has admitted to conspiring with his spouse to steal scientific trade secrets from a children's hospital and sell them to the People's Republic of China.
Former Dublin resident Yu Zhou and his 47-year-old wife, Li Chen, confessed to establishing a company in China to personally profit from cutting-edge research work done at Nationwide Children's Hospital in Columbus, Ohio.
Zhou and Chen worked in separate medical research labs at NCH's Research Institute for 10 years each, Zhou starting his job in 2007 and Chen beginning hers in 2008.
The couple were arrested in California in July 2019 and charged with conspiring to steal exosome-related secrets concerning the scientific research, identification, and treatment of a range of pediatric medical conditions.
While working at the institute, 50-year-old Zhou's research included a novel isolation method in which exosomes could be isolated from one drop of blood.
"This method was vital to the research being conducted in Zhou’s lab—because necrotizing enterocolitis is a condition found primarily in premature babies, only small amounts of fluid can safely be taken from them," said the Department of Justice.
Husband and wife monetized this secret research by creating “isolation kits” then starting a company in China to sell their product. The couple received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China.
Zhou pleaded guilty in US District Court on December 11 to conspiring to steal trade secrets and to one count of wire fraud. Chen pleaded guilty to the same crimes on July 30.
As part of their pleas, the couple has agreed to forfeit property or gains associated with their crimes. For Chen, this included approximately $1.4m, 500,000 shares of common stock of Avalon GloboCare Corp., and 400 shares of common stock of GenExosome Technologies, Inc. The details of Zhou’s forfeiture will be finalized through the sentencing process.
“China’s endemic efforts to rob, replicate and replace products that they do not have the ability to develop themselves will not go unchecked, and those who seek to profit from the theft of trade secrets will be held accountable,” said John Demers, assistant attorney general for national security.