Man Who Worked At Local Research Institute For 10 Years Pleads Guilty To Conspiring To Steal Trade Secrets, Sell Them In China
A former Dublin, Ohio, man pleaded guilty in U.S. District Court today to conspiring to steal exosome-related trade secrets concerning the research, identification and treatment of a range of pediatric medical conditions.
Yu Zhou, 50, also pleaded guilty to conspiring to commit wire fraud.
Zhou admitted to conspiring to steal scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for his own personal financial gain in China.
“Today’s plea underscores the Department of Justice’s commitment to protecting American research and trade secrets from those incentivized to steal them by Chinese Government programs,” said John C. Demers, Assistant Attorney General for National Security. “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.”
“The Chinese government has created a large-scale, sophisticated system to steal American ingenuity,” U.S. Attorney David M. DeVillers said. “We hope this conviction demonstrates that we will fight this system.”
“Zhou and his wife have both accepted responsibility for establishing a company in China to personally profit from the cutting-edge work done at Nationwide Children’s Hospital,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “The FBI will continue to work closely with our partners to protect the innovations that have made America a global leader.”
Zhou and his wife, Li Chen, 47, worked in separate medical research labs at the Research Institute for 10 years each (Zhou from 2007 until 2017 and Chen from 2008 until 2018). They conspired to steal trade secrets related to exosome research from Nationwide Children’s Hospital.
Exosomes play a key role in the research, identification and treatment of a range of medical conditions, including necrotizing enterocolitis (a condition found in premature babies), liver fibrosis and liver cancer.
According to his plea agreement, Zhou and Chen conspired to steal and then monetize one of the trade secrets by creating and selling exosome “isolation kits.” Zhou’s research at Nationwide Children’s 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.
The defendants admitted to starting a company in China to sell the isolation kits. They received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China.
Zhou and Chen were arrested in California in July 2019 and their case was unsealed in August 2019 when they appeared in federal court in Columbus. Chen pleaded guilty in July 2020 to conspiring to steal trade secrets and commit wire fraud.
As part of their pleas, the couple has agreed to forfeit property or gains associated with their crimes. For Chen, this included approximately $1.4 million, 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.
David M. DeVillers, United States Attorney for the Southern District of Ohio; John C. Demers, Assistant Attorney General for National Security; and Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the plea entered into today before U.S. District Judge Sarah D. Morrison. Assistant United States Attorneys S. Courter Shimeall, Peter K. Glenn-Applegate, Special Assistant United States Attorney J. Michael Marous and National Security Division Trial Attorney Matthew J. McKenzie, are representing the United States in this case.