Couple Sentenced for Conspiring to Steal Medical Secrets to Sell to China

According to a Department of Justice press release dated April 20, 2021, a 51-year old man from Dublin, Ohio, Yu Zhou, was sentenced to 33 months in prison after pleading guilty to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for personal financial gain and conspiring to commit wire fraud. He worked in a medical research lab at the Research Institute for ten years.

Exosomes can help identify a number of different medical conditions, including those found in premature babies and in the liver. Zhou’s wife, Li Chen, 48, who worked in a separate lab of the Research Institute, conspired with him to steal trade secrets and monetize them by creating exosome “isolation kits” using a novel method from the Research Institute. The couple started a company in China to sell the kits.

The press release stated, “The defendants 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 also part of application processes related to multiple Chinese government programs, including talent plans, a method used by China to transfer foreign research and technology to the Chinese government.”

Chen also pleaded guilty and was sentenced to 30 months in prison in February.

Assistant Attorney General John C. Demers for the Justice Department’s National Security Division explained, “Zhou’s greed was encouraged and enabled by a series of Chinese Government programs which incentivize thievery in an attempt to supplement China’s own research and development goals on the back of American ingenuity and investment. This successful prosecution should serve as a warning to anyone who seeks to profit from pilfering hard-earned U.S. trade secrets.”

As a punishment for their crime, in addition to sentencing, the couple will forfeit approximately $1.45 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc. They will also pay $2.6 million in restitution.