When California Governor Gavin Newsom embarked on his trip to China late last week, he said he wasn't going to attempt to discuss human rights violations by the CCP regime or the Chinese-manufactured fentanyl that's fueled an addiction and overdose epidemic, because his trip was narrowly focused on fighting climate change, "strengthening cultural ties and combating xenophobia," even though components for the renewable energy technologies he champions are "sourced in the Xinjiang region, where Chinese officials are known to use forced labor from Muslim Uyghurs." His spokesperson, Erin Mellon, said:

“The trip is predominantly focused on climate. We are obviously a state, so I think we look to our federal partners on federal issues.”

Alrighty, then. As it happens, we've got a state issue that Gavin Newsom can discuss with the people in Beijing: the illegally-operated biolab in Reedley, California that was discovered in December, 2022, in violation of numerous state and federal laws, and whose Chinese operator, Jia Bei Zhu, was arrested last week. 

Here's the summary of what we've learned since the last update:

• Zhu operated the lab and associated companies, and had changed his name to "David He" after his Canadian companies were slapped with a $330 million judgment
• A former resident of Clovis, CA, Zhu is a Chinese national also known as Jesse Zhu, Qiang He, and David He, and was charged with making false statements to federal officers, namely the FDA agents who interviewed him regarding the Reedley lab
• The lab's unsanitary practices included things like storing "peed-on pregnancy tests" and jars of urine in desk drawers
• Zhu filed claims totaling $80 million against Fresno County and the City of Reedley for "destroying" his "research" and euthanizing 800 mice he had stored in inhumane conditions
• At least 30 corporate entities are related to Zhu and his illegal in vitro diagnostics companies, which sold test kits manufactured in China as "Made in the USA"
• Zhu's companies are based in Qingdao High Tech park, which is run by the Chinese Communist Party
• The criminal investigation into additional targets is ongoing; affidavits attached to Zhu's complaint have been sealed to protect the integrity of that investigation.

Let's get into the details.

Zhu is a Chinese citizen who used multiple aliases to run dozens of corporations in the U.S. in Canada to allegedly manufacture in vitro pregnancy, drug screening, and COVID-19 tests. The Reedley location contained 1,000 lab mice (200 of which were dead) living in inhumane and unsanitary conditions, thousands of vials containing blood, urine, and other unspecified substances, and numerous bacterial and viral agents such as chlamydia, Hepatitis-B, Hepatitis-C, respiratory syncytial virus (RSV), human immunodeficiency virus (HIV), E. coli, dengue, rubella, and SARS-CoV-2 (COVID-19).

Far from being simply an unlicensed laboratory, the facility didn't seem to meet any type of sanitation requirements. Zhu and his business partners (which include CCP-owned companies; more on that below) failed to contract with any type of medical waste disposal company, and when local public health officials finally gained access to the facility they found "biologicals" such as "jars of urine and peed-on pregnancy tests," stuffed in desk drawers, as Reedley City Manager Nicole Zieba told the Fresno County Board of Supervisors on August 8.

The lab in Reedley was purportedly being run by Prestige Biotech Incorporated, which allegedly took over the assets of Universal Meditech, Inc. (UMI), of Fresno, when UMI went out of business. Federal investigators believe that Zhu ran both companies, though, through aliases. UMI sold and distributed in-vitro diagnostic test kits that seem to have been manufactured in China by another of Zhu's companies, Ai De Diagnostic, which operates in China and Canada, but whose registered agent in the United States is Vivian Li with, you guessed it, Universal Meditech.  

Ai De Diagnostic's headquarters are in the Qingdao High-Tech Industrial Park, which was established and is overseen by the Chinese Communist Party. 

Here's where it gets a little crazy. Or crazier.

A Web of Shell Corporations

We already knew that there were some legal and financial reasons for the web of corporations, LLC's, and limited partnerships the cast of characters were involved with. From my August 6, 2023 piece:

What has been found is expensive litigation. In the federal courts, there’s a $2.2 million judgment against UMI out of Louisiana (Sensiva Health, LLC vs. Universal Meditech, Inc., et al), and a pending case in Alabama brought by Valor Distribution, a company that distributed UMI-produced COVID-19 tests that were later recalled by the FDA. In California, UMI is being sued by its former attorney, its former Realtor, and its former landlord for unpaid bills.

Unfortunately for Zhu, the statement of facts laid out in the criminal complaint essentially verify all of the allegations made against UMI in the Alabama federal case, which has to do with breach of contract and RICO allegations related to the distribution of unlicensed COVID-19 test kits, so the amount of money owed in legal judgments is likely to increase.

There were rumblings about issues this group of companies had in Texas and in Canada at the time of my previous update, but I wasn't able to find definitive information at that time. However, in the criminal complaint against Zhu it's reported that there's a massive judgment against one of Zhu's Canadian companies, IND Diagnostics. The Vancouver Sun reported in 2016 (around the time UMI and a sister company, Advance Meditech, started operating in the United States):

A judge has ordered a Canadian businessman and several of his employees to pay a total of more than $330 million for profiting from the theft of technology related to the separation of sex chromosomes from bull semen.

B.C. Supreme Court Justice Shelley Fitzpatrick ordered Jesse Zhia-Bhei Zhu and his IND group of companies to pay nearly $270 million to XY LLC, a Delaware-based firm that has the rights to the technology.

Zhu also has IND-related corporations in Washington State that are now inactive: IND Diagnostic, Inc., International Newtech Development, Inc., and Ai De Diagnostic Co, Ltd.

From my research thus far, there are more than 30 legal entities in this maze of shell corporations, and that's just in the United States.

Zhu's Claiming $80 Million in Losses

Still, knowing all of this, Zhu filed claims against the City of Reedley and Fresno County totaling $80 million for the loss of his "biologicals" and the lab mice. Seriously.

Owners of a controversial Fresno medical lab whose assets were found to be illegally stored at a Reedley warehouse and then destroyed have filed a claim for $50 million.

Universal Meditech, Inc. filed claims Friday against Fresno County and Monday against the city of Reedley. The company’s biological materials, which included 20 different diseases and nearly 1,000 lab mice, had been uncovered in Reedley.

On Friday attorneys for the city of Reedley had sent a bill for $310,000 to representatives of UMI and Prestige Biotech — the company that inherited UMI’s assets — seeking reimbursement for the cost to destroy the biological materials.

Reedley officials received a claim for $30 million, City Manager Nicole Zieba said. Zieba believes that amount is a typo, as the claim cites losses totaling $50 million.

So, if Prestige Biotech allegedly took the assets and UMI was in bankruptcy -- well, let's just say that's an interesting legal wrinkle. However, it was the filing of that claim that led to Zhu's arrest.

Zhu had broken off contact with investigators shortly before the media had found out about the 20 deadly diseases, 1,000 lab mice, and thousands of gallons of biological materials owned by UMI at 850 I St. in Reedley.

“When all of this kind of went public, we lost communication,” Zieba said. “We knew that the feds, the FDA, were working on charges. They were able to get a warrant. But even if you have a warrant, if you don’t know where the person is, it’s hard to arrest him.”

This [filing of a claim] gave federal agents the means to get Zhu. Harper said she and Zhu had become comfortable enough that they could speak on the phone. They coordinated that he would arrive at 11 a.m. Thursday at the warehouse to meet her and Zieba.

Jia Bei Zhu, Jesse Zhu, or David He?

Throughout the investigation process, the various agencies involved had email correspondence with various alleged representatives of UMI and PBI, and in-person meetings with a man who claimed to be the on-site representative/consultant for both companies and with another man who had been the sales manager for UMI from 2019 through 2022. The man who claimed to be the on-site representative was Zhu, but he identified himself to authorities as Qiang "David" He.

Zhu's fingerprints were on file with federal authorities from his seven entries into the United States from China between 2003 and 2008, and they matched the fingerprints taken from "Qiang He" when he entered the United States from China in 2021. Zhu provided federal authorities with an employment authorization card issued by the United States Citizen and Immigration Services (“USCIS”), which FDA OCI special agents verified was authentic. The complaint concludes that Zhu must have provided immigration officials with false documents to obtain that employment authorization card, but doesn't state the most obvious problem: with all of the technology we have, how could the fingerprints he provided not have come back as matching an entirely different person?

Zhu was identified by UMI's former sales manager as being the person in charge, even though the name on the corporate filings was Zhaoyan Wang until October 2022. In a September 2022 deposition, it was apparent that that she had "minimal knowledge" of UMI's operations, according to Fox News:

Wang said she didn't use a company email address; instead, she communicated through a Chinese-based system called Baidu that's also the dominant online search engine there. Wang testified there was nobody in charge of UMI's financial department and she had great difficulty in providing first and last names of the 10 people she estimated worked at UMI.

"Yeah. Actually, I don't get involved in the – like, packaging or production. That's why I don't really know the names of those employees employed at those posts," Wang said.

Wang testified she neither held a scientific degree nor took any formal coursework in biomedicine. She also said she didn't know how many of UMI's workers were U.S. citizens or had authorization to be in the United States.

Zhu slipped up and left his old driver's license in the Reedley lab, which helped FDA OCI agents confirm that Zhu and David He are the same person.

On September 13, 2023, FDA OCI special agents executed a federal search warrant for PBI’s Reedley warehouse. During the search, the agents found a photocopy of a British Columbia, Canada, driver’s license that was issued to “Jia Bei Zhu” in 2014. The agents compared the photograph on the front of the license to body worn camera footage of the person who identified himself as Qiang “David” He during the FDA’s May 2023 inspection of the Reedley warehouse. The agents confirmed that it was the same person. The driver’s license and a screenshot taken from the body worn camera footage are included below for reference:

Whoops.

The underlying affidavits undoubtedly contain extremely interesting information, but they are sealed:

These documents discuss an ongoing criminal investigation that is neither public nor known to all the targets of the investigation. Therefore, there is good cause to seal these documents because their premature disclosure may jeopardize the investigation, including by giving the targets an opportunity to destroy or tamper with evidence, change patterns of behavior, notify confederates, and flee. 

Three Congressional committees are currently looking into the situation, and the House Select Committee on the CCP issued a friendly subpoena to the City of Reedley. Reedley officials were cooperative and provided "thousands of pages of documents, hundreds of photographs, and hours of video." In announcing the friendly subpoena, Rep. Mike Gallagher (R-WI) noted that "these organizations and their officers are also implicated in major fraud investigations and other misconduct in multiple countries," and said:

“It is deeply disturbing that a Chinese company set up a clandestine facility in small-town America that contained, per the CDC, ‘at least 20 potentially infectious agents’ like HIV and the deadliest known form of malaria. We are grateful to the city of Reedley for their cooperation. The American people deserve answers, and we will get to the bottom of this issue to ensure our adversaries are not endangering the safety of Americans on our soil."

However, a source close to the panel told Politico that at that time:

[T]he city ultimately turned over thousands of pages of documents, hundreds of photographs, and hours of video, which the panel is still combing through. But already, this person says, “the review of the evidence thus far has identified troubling gaps in safeguards that allowed the clandestine facility to operate with impunity, as well as serious deficiencies in the federal government’s response."

Democrat Rep. Jim Costa, who repsresents Reedley, praised Zhu's arrest: 

“The arrest of Jia Bei Zhu is a step in the right direction to hold him and those behind the illegal Reedley lab accountable. I brought federal agencies in and pushed for investigations, which resulted in this arrest. I am hopeful that further investigations will fully unravel the details and purpose of the lab in Reedley.”

We will definitely be following the investigations and Zhu/He's trial.