Hospital Researchers Jailed for Stealing and Selling Research Data to China

A woman who worked in a medical research lab at the Nationwide Children’s Hospital in Columbus, OH has been jailed for stealing sensitive research data and selling the information to the People’s Republic of China.

Li Chen, 47, and her husband Yu Zhou, 50, were both employed as medical researchers and worked in separate labs at the hospital’s Research Institute for more than 10 years. The former Dublin, OH residents were arrested in California in July 2019 and were subsequently charged over the alleged theft of cutting-edge scientific research.

Zhou was working on a novel technique that allowed exosomes to be isolated from small quantities of blood. Exosomes are used in the research, identification, and treatment of several medical conditions, such as necrotizing enterocolitis. The novel exosome isolation method was a vital process in the research into necrotizing enterocolitis, as the condition affects premature babies and only small blood samples can be taken safely.

The couple set up a company in China, stole at least five trade secrets related to exosome isolation, and then monetized the trade secrets by creating and selling exosome isolation kits. They then provided them to China and received benefits from the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China. Chen also applied to several government talent plans in China, which are used to transfer foreign research and technology to the Chinese government.

“For far too long, the People’s Republic of China (PRC) has encouraged the outright theft of American trade secrets through Chinese government programs that reward researchers for stealing what China cannot produce through its own ingenuity,” said Assistant Attorney General John C. Demers for the National Security Division. “These programs, like the Thousand Talents, are not innocuous platforms for academic collaboration.”

In July 2020, Chen pleaded guilty to conspiracy to commit wire fraud and the theft of scientific trade secrets for personal financial gain. Chen was recently sentenced to a 30-month jail term and, as part of her plea deal, agreed to pay $2.6 million in restitution, and forfeit around $1.4 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc. Zhou also pleaded guilty to conspiracy to commit wire fraud and is currently awaiting sentencing.

“The FBI will not stop its efforts to identify people who steal technology for their own financial benefit or for the benefit of a foreign government,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division.

Update April 22, 2021: On April 20, 2021, the Department of Justice announced that Yu Zhou has been sentenced to serve 33 months in Federal prison for conspiring to steal exosome-related trade secrets concerning the research, identification and treatment of a range of pediatric medical conditions.

Chinese Government Targeting Health and Genetic Data of U.S. Citizens

China is not only trying to obtain sensitive medical research data. The National Counterintelligence and Security Center (NCSC) has recently drawn attention to efforts by China to obtain the healthcare data and DNA sets of Americans through cyberattacks, and partnerships between Chinese companies and U.S. states and healthcare organizations.

National Security laws in China require all Chinese companies to share any data they collect with the government. According to the NCSC, by 2019, 15 Chinese companies had been licensed to conduct genetic testing or genetic sequencing on patients in the United States. They had access to genetic data which could have been provided to the Chinese government.

The NSCS said genetic and healthcare data are being used to advance China’s AI and precision medicine industries, yet foreign companies are prevented from accessing the medical data of its own citizens. “Over time, this dynamic could allow China to outpace U.S. biotech firms with important new drugs and health treatments and potentially displace American firms as global biotech leaders,” explained NCSC in a February 2021 report.

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.