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http://www.fbi.gov/newyork/press-releases/2013/manhattan-u.s.-a
Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce
Criminal Complaint Against Three New York-Based University Researchers for
Conspiring to Receive Bribes from a Chinese Company and a Chinese Government
-Supported Research Institute
Defendants Allegedly Acquired Proprietary, Federally Funded Research on
Behalf of Chinese Company and Government-Supported Entity
U.S. Attorney’s Office
May 20, 2013
Southern District of New York
(212) 637-2600
Preet Bharara, the United States Attorney for the Southern District of New
York, and George Venizelos, the Assistant Director in Charge of the New York
Office of the Federal Bureau of Investigation (FBI), announced today the
filing of charges against Yudong Zhu, Xing Yang, and Ye Li, three
researchers who worked on improving MRI technology at a university in New
York, New York, but who also had undisclosed affiliations with a Chinese
company performing the same type of research. The research at the university
was funded by a multi-million-dollar federal grant from the National
Institutes of Health. The defendants are each charged with one count of
commercial bribery in connection with a conspiracy to receive payments from
the Chinese company and a Chinese government-supported research institution
in exchange for providing non-public information about research they
conducted at the university. Zhu is also charged with lying about conflicts
of interest in connection with the federal research grant. Zhu and Yang were
arrested at their residences in New York yesterday, and Li is believed to
have flown to China before charges were brought. Zhu and Yang will be
presented later today in Manhattan federal court before U.S. Magistrate
Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, this is a case of
inviting and paying for foxes in the henhouse. These defendants allegedly
colluded with representatives from a Chinese governmental entity and a
direct competitor of the university for which they worked to illegally
acquire NIH-funded research for the benefit of those entities, as described
in the complaint. The defendants also allegedly deceived the university and
others about their professional allegiances to competing Chinese interests.
The acquisition of federally funded research for the benefit of these
Chinese entities is a serious crime and will not be tolerated by this office
.”
FBI Assistant Director in Charge George Venizelos said, “As alleged, while
in the United States, these defendants conducted important research
partially funded by the federal government to advance important MRI
technology. Instead of working exclusively for a New York research
institution, the defendants took bribes to acquire research for the benefit
of both a Chinese competitor and a Chinese government institution.
Protecting our nation’s technology and intellectual property against these
types of thefts remains one of the FBI’s top priorities.”
According to the allegations in the complaint unsealed today in Manhattan
federal court:
In 2008, a university research medical center located in New York, New York
(the “university”) hired Zhu, an accomplished researcher and innovator in
the field of magnetic resonance imaging (MRI) technology, to teach and
conduct research related to innovations in MRI technology. Zhu came to the
university, in large part, to use a specific university laboratory that
possessed highly specialized equipment to test MRI innovations.
In 2010, Zhu caused the university to apply for and receive a grant from the
National Institutes of Health (NIH) that provided millions of dollars in
funding over a five-year period for Zhu’s research relating to improving
the imaging capability of MRI equipment (the “NIH grant”). After Zhu
started his research pursuant to the NIH grant, he arranged for Yang and Li
to move to New York from China to work with him in 2011 and 2012,
respectively.
While working for the University, Zhu, Yang, and Li each had undisclosed
affiliations with United Imaging Healthcare (“United Imaging”), a Chinese
medical imaging company, and the Shenzen Institute of Advanced Technology (
SIAT), a Chinese government-sponsored research institute. When Zhu arranged
for Yang and Li to work with him at the university, Zhu also arranged for
them to receive certain financial benefits from a co-conspirator (“CC-1”),
who was an executive with United Imaging and who was also affiliated with
SIAT. For example, Zhu arranged for CC-1 to pay for Yang’s tuition at a
graduate school in New York, New York, that was affiliated with the
university and Li’s rental apartment. CC-1 also paid for Yang and Li’s
travel between China and New York while they worked at the university.
In addition, the university recently discovered that during their employment
at the university, Zhu, Yang, and Li each maintained an e-mail address that
included the domain “united-imaging.com.” The university also obtained a
United Imaging employee registration for Li, which included his signature
dated September 27, 2012. Zhu, Yang, and Li concealed from, and failed to
disclose, these payments from and relationships with competing research
entities in China.
Yang has stated that while working on the NIH grant at the university, he
also shared with individuals at United Imaging the research results from his
and Zhu’s work at the university that was conducted pursuant to the NIH
grant. Through an examination of university e-mail accounts, the university
learned that from August 2011 through January 2013, individuals with e-mail
addresses that included the united-imaging.com domain corresponded with Zhu
and Yang regarding issues related to MRI equipment prototypes, experiments,
and project updates. These e-mails were sent to and/or from accounts
including Zhu’s personal Gmail account, his United Imaging e-mail address,
and Yang’s Hotmail account.
Zhu also had other material conflicts of interest that he concealed from the
university. Zhu owned a patent related to MRI technology, the value of
which would be directly impacted by his NIH grant research. In addition, at
the same time that he was leading the research for the NIH grant, Zhu, along
with CC-1, was leading a similar research project in China related to MRI
technology that was funded by a grant from the Chinese government. Zhu and
CC-1 were also part of the same research team at SIAT. The 2011-2012 annual
report for a certain division of SIAT included photographs of ZHU and CC-1
as members of its MRI Research Team. In financial interest disclosure forms
that the university required Zhu to complete in connection with the NIH
grant, Zhu failed to disclose, and falsely answered, questions regarding
these outside affiliations and financial conflicts of interest.
* * *
Zhu, 44, of Scarsdale, New York; Yang, 31, of Hartsdale, New York; and Li,
31, of Hartsdale, New York, are each charged with one count of commercial
bribery conspiracy, which carries a maximum sentence of five years in prison
. Zhu is also charged with one count of falsification of records in
connection with the NIH grant, which carries a maximum sentence of 20 years
in prison.
Mr. Bharara praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex
Frauds Unit. Assistant United States Attorneys Christian Everdell and
Zachary Feingold are in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the
defendants are presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce
Criminal Complaint Against Three New York-Based University Researchers for
Conspiring to Receive Bribes from a Chinese Company and a Chinese Government
-Supported Research Institute
Defendants Allegedly Acquired Proprietary, Federally Funded Research on
Behalf of Chinese Company and Government-Supported Entity
U.S. Attorney’s Office
May 20, 2013
Southern District of New York
(212) 637-2600
Preet Bharara, the United States Attorney for the Southern District of New
York, and George Venizelos, the Assistant Director in Charge of the New York
Office of the Federal Bureau of Investigation (FBI), announced today the
filing of charges against Yudong Zhu, Xing Yang, and Ye Li, three
researchers who worked on improving MRI technology at a university in New
York, New York, but who also had undisclosed affiliations with a Chinese
company performing the same type of research. The research at the university
was funded by a multi-million-dollar federal grant from the National
Institutes of Health. The defendants are each charged with one count of
commercial bribery in connection with a conspiracy to receive payments from
the Chinese company and a Chinese government-supported research institution
in exchange for providing non-public information about research they
conducted at the university. Zhu is also charged with lying about conflicts
of interest in connection with the federal research grant. Zhu and Yang were
arrested at their residences in New York yesterday, and Li is believed to
have flown to China before charges were brought. Zhu and Yang will be
presented later today in Manhattan federal court before U.S. Magistrate
Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, this is a case of
inviting and paying for foxes in the henhouse. These defendants allegedly
colluded with representatives from a Chinese governmental entity and a
direct competitor of the university for which they worked to illegally
acquire NIH-funded research for the benefit of those entities, as described
in the complaint. The defendants also allegedly deceived the university and
others about their professional allegiances to competing Chinese interests.
The acquisition of federally funded research for the benefit of these
Chinese entities is a serious crime and will not be tolerated by this office
.”
FBI Assistant Director in Charge George Venizelos said, “As alleged, while
in the United States, these defendants conducted important research
partially funded by the federal government to advance important MRI
technology. Instead of working exclusively for a New York research
institution, the defendants took bribes to acquire research for the benefit
of both a Chinese competitor and a Chinese government institution.
Protecting our nation’s technology and intellectual property against these
types of thefts remains one of the FBI’s top priorities.”
According to the allegations in the complaint unsealed today in Manhattan
federal court:
In 2008, a university research medical center located in New York, New York
(the “university”) hired Zhu, an accomplished researcher and innovator in
the field of magnetic resonance imaging (MRI) technology, to teach and
conduct research related to innovations in MRI technology. Zhu came to the
university, in large part, to use a specific university laboratory that
possessed highly specialized equipment to test MRI innovations.
In 2010, Zhu caused the university to apply for and receive a grant from the
National Institutes of Health (NIH) that provided millions of dollars in
funding over a five-year period for Zhu’s research relating to improving
the imaging capability of MRI equipment (the “NIH grant”). After Zhu
started his research pursuant to the NIH grant, he arranged for Yang and Li
to move to New York from China to work with him in 2011 and 2012,
respectively.
While working for the University, Zhu, Yang, and Li each had undisclosed
affiliations with United Imaging Healthcare (“United Imaging”), a Chinese
medical imaging company, and the Shenzen Institute of Advanced Technology (
SIAT), a Chinese government-sponsored research institute. When Zhu arranged
for Yang and Li to work with him at the university, Zhu also arranged for
them to receive certain financial benefits from a co-conspirator (“CC-1”),
who was an executive with United Imaging and who was also affiliated with
SIAT. For example, Zhu arranged for CC-1 to pay for Yang’s tuition at a
graduate school in New York, New York, that was affiliated with the
university and Li’s rental apartment. CC-1 also paid for Yang and Li’s
travel between China and New York while they worked at the university.
In addition, the university recently discovered that during their employment
at the university, Zhu, Yang, and Li each maintained an e-mail address that
included the domain “united-imaging.com.” The university also obtained a
United Imaging employee registration for Li, which included his signature
dated September 27, 2012. Zhu, Yang, and Li concealed from, and failed to
disclose, these payments from and relationships with competing research
entities in China.
Yang has stated that while working on the NIH grant at the university, he
also shared with individuals at United Imaging the research results from his
and Zhu’s work at the university that was conducted pursuant to the NIH
grant. Through an examination of university e-mail accounts, the university
learned that from August 2011 through January 2013, individuals with e-mail
addresses that included the united-imaging.com domain corresponded with Zhu
and Yang regarding issues related to MRI equipment prototypes, experiments,
and project updates. These e-mails were sent to and/or from accounts
including Zhu’s personal Gmail account, his United Imaging e-mail address,
and Yang’s Hotmail account.
Zhu also had other material conflicts of interest that he concealed from the
university. Zhu owned a patent related to MRI technology, the value of
which would be directly impacted by his NIH grant research. In addition, at
the same time that he was leading the research for the NIH grant, Zhu, along
with CC-1, was leading a similar research project in China related to MRI
technology that was funded by a grant from the Chinese government. Zhu and
CC-1 were also part of the same research team at SIAT. The 2011-2012 annual
report for a certain division of SIAT included photographs of ZHU and CC-1
as members of its MRI Research Team. In financial interest disclosure forms
that the university required Zhu to complete in connection with the NIH
grant, Zhu failed to disclose, and falsely answered, questions regarding
these outside affiliations and financial conflicts of interest.
* * *
Zhu, 44, of Scarsdale, New York; Yang, 31, of Hartsdale, New York; and Li,
31, of Hartsdale, New York, are each charged with one count of commercial
bribery conspiracy, which carries a maximum sentence of five years in prison
. Zhu is also charged with one count of falsification of records in
connection with the NIH grant, which carries a maximum sentence of 20 years
in prison.
Mr. Bharara praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex
Frauds Unit. Assistant United States Attorneys Christian Everdell and
Zachary Feingold are in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the
defendants are presumed innocent unless and until proven guilty.
