Illegal Biolab In California Received $1.3 Million From Chinese Banks: House Committee

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by Tyler Durden
Monday, Nov 20, 2023 - 10:00 PM

Authored by Sophie Li via The Epoch Times (emphasis ours),

A black market Chinese biolab in Reedley, California, located about 25 miles southeast of Fresno, received more than $1.3 million in unexplained payments from banks in China while in operation, according to U.S. lawmakers.

The illegal biolab had thousands of vials and other containers, some labeled with potentially deadly infectious agents on site, including HIV and Ebola, according to officials.

On Nov. 15, Former House Speaker Kevin McCarthy (R–Calif.) and Rep. Jim Costa (D–Calif.) discussed their concerns about the lab at a press conference with local officials and the House Select Committee on the Chinese Communist Party.

“We’re thinking about how COVID really came out of China and a lot of questions that are there in line, that we would allow a Chinese nationalist to come to this country and to set up a private lab,” Mr. Costa said during the press conference. “And what we found is that all it takes to set up a private lab in America is to get a business license.”

The committee also issued a 42-page report on the issue which criticizes the Centers for Disease Control and Prevention (CDC) and other federal agencies for not fully investigating the site or helping dispose of the hazardous substances.

Local officials spent months repeatedly trying to obtain assistance from the CDC,” the report stated, noting “the CDC refused to speak with them and, on a number of occasions, it was reported by local officials that the CDC hung up on them mid-conversation.”

Local officials received a similar response when they reached out to other federal agencies, according to the report.

The research lab came to light in December 2022 when Jesalyn Harper, a code enforcement officer for the city, noticed a green garden hose protruding from the back of a warehouse that was believed to be vacant.

According to the report, Ms. Harper initially referred the case to Fresno County and the Federal Bureau of Investigation (FBI).

However, approximately two months later, the FBI informed her it had closed its investigation because “the Bureau believed that there were no weapons of mass destruction on the property,” the report stated.

Local officials obtained an inspection warrant in March, according to the report, and again searched the warehouse. They found what appeared to be blood and tissue samples, along with unlabeled vials and other biological material, raising concerns of possible pathogens.

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The warehouse space also housed nearly 1,000 lab mice, nearly 200 of which were found dead. Lab workers said that the mice were designed “to catch and carry the COVID-19 virus,” according to the report.

After repeated requests by local and state officials, the CDC ultimately responded to the site in May 2023 and found thousands of vials containing at least 20 “potentially infectious” agents, including SARS-CoV-2, chlamydia, E. coli, streptococcus pneumonia, HIV, hepatitis, herpes, rubella, and malaria, sparking serious concerns regarding biosecurity, according to the report. However, the CDC had identified the agents based only on the labels on the samples, said the report.

Despite offers from city officials to cover testing expenses, the CDC declined to conduct tests or examine the unlabeled vials and samples, said lawmakers.

The report stated, “Even though it had not tested any samples from the Reedley Lab, the CDC concluded that ‘[t]here was no evidence of select agents or toxins.’”

Meanwhile, local and county officials, along with a contracted hazardous waste removal firm, continued to investigate and clean up the site, which confirmed and expanded on their prior findings.

“Local officials and contractors reported that they found a freezer labeled ‘Ebola’ with silver sealed bags found inside consistent with how the Reedley Biolab operators stored sensitive biological and other materials,” the report stated.

Ebola is considered a “select agent,” according to the committee.

The report criticized the decision made by the CDC to not test the materials, saying it could have endangered local residents.

Chairman of the Select Committee on the Chinese Communist Party (CCP), Rep. Mike Gallagher (R-Wis.), speaks during a press conference unveiling the results of the Committee’s investigation into the biolab discovered in Reedley, Calif., in Washington on Nov. 15, 2023. (Madalina Vasiliu/The Epoch Times)

“CDC’s refusal to test left local officials unable to assess the danger to the City of Reedley community or inform the community about what steps, if any, it should take to protect public safety,” the report said.

Mr. McCarthy echoed the message.

“The CDC and others hung up on them, ignored them, until Congressman Jim Costa called them,” he said at the press conference. “But when the CDC showed up they should’ve done what was right then, and they did not. They did not test the pathogens. They did not even find all of them. They left a freezer with Ebola in it, and we know how lethal that is and what could happen, especially in the Central Valley,” said Mr. McCarthy.

In response to a request for comment, a CDC official with knowledge of the investigation said the CDC "strongly disputes the report’s conclusions critical of the agency."

"The report includes numerous inaccuracies, including both the charge that CDC did not respond to local requests for aid and the false implication that CDC had the authority to unilaterally investigate or seize samples from ... [the] Reedley building. Indeed, CDC has, and continues to be actively engaged, within its regulatory authorities, in the intergovernmental efforts to address issues surrounding the facility,” the CDC official said in a statement.

PRC Ties

Investigations also uncovered connections between the biolab owner and founder, Jia Bei “Jesse” Zhu, and the Chinese Communist Party.

In China, he held a top position in a state-controlled company with ties to Chinese military-civil fusion activities. The illegal biolab also received over $1.3 million in unexplained payments via wire transfer from People's Republic of China (PRC) banks during its operation.

However, the total amount Mr. Zhu received may be significantly higher, the report stated, due to the committee's limited access to data and records.

Arrest Made

Mr. Zhu was arrested in October by Food and Drug Administration agents and was later charged with manufacturing and distributing misbranded medical devices and making false statements to the FDA.

A complaint filed Oct. 18 shows Mr. Zhu, 62, came to the United States from China under the alias Qiang "David" He in 2021. Mr. Zhu identified himself as Qiang He multiple times to officials from various agencies and claimed he could speak on behalf of two companies, Universal Meditech, Inc. and Prestige Biotech Inc.

However, fingerprints from Qiang He matched the fingerprints obtained from Mr. Zhu when he came into the country seven times between 2003 and 2008.

He faces a maximum of three years in prison for the misbranding charge and five more years for the false statements charge, according to the U.S. Attorney's office for the Eastern District of California.

As per court records, from December 2020 to March 2023 Mr. Zhu and accomplices purportedly engaged in the unauthorized manufacturing, importation, sale, and distribution of hundreds of thousands of COVID-19 and other test kits in both the United States and China.

In addition to the charges for the Reedley biolab, the committee found Mr. Zhu is a wanted fugitive in Canada with an approximately $242 million judgment against him for stealing intellectual property.

“At a minimum, the Reedley Biolab shows the profound threat that unlicensed and unknown biolabs pose to our country,” the report states in its conclusion. “At worst, this investigation revealed significant gaps in our nation’s defenses and pathogen-related regulations that present a grave national security risk that could be exploited in the future.”

Brad Jones and Lear Zhou contributed to this report.