Li Chen, a 47-year-old Ohio resident, was sentenced to thirty months in prison for stealing trade secrets associated with Exosomes research from the systems of Nationwide Children’s Hospital’s Research Institute and selling them to the Chinese government.
The sentencing took place after Chen and her husband Yu Zhou pleaded guilty to stealing scientific trade secrets from the medical research institute and then selling them to China. Both Chen and Zhou worked in separate medical research labs at the Research Institute for 10 years each and stole at least five Exosomes research-related data in the period.
After she stole the trade secrets, Chen started a company in China to sell exosome “isolation kits” and for her work, she received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China.
Advanced medical data about exosomes are extremely valuable worldwde as they play a key role in the research, identification and treatment of a range of medical conditions, including necrotizing enterocolitis, liver fibrosis and liver cancer.
Aside from getting sentenced to thirty months in prison, Chen has also been ordered to pay $2.6 million in restitution, and forfeit approximately $1.25 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc. Her husband Yu Zhou is awaiting sentencing.
“For far too long, the People’s Republic of China (PRC) has encouraged the outright theft of American trade secrets through Chinese government programmes 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 programmes, like the Thousand Talents, are not innocuous platforms for academic collaboration. Today’s conclusion of yet another successful prosecution for theft of trade secrets encouraged by the PRC Government serves as a warning to all who might seek to profit from China’s illicit efforts to achieve technological dominance through thievery.”
“Chen and her husband executed a scheme over the course of several years to set up businesses in China, steal American research and profit from doing so. Chen willingly took part in the Chinese government’s long-term efforts to steal American intellectual property. She deserves time in federal prison,” said U.S. Attorney David M. DeVillers for the Southern District of Ohio.
This is not the first time that criminals have been found stealing precious trade secrets from the US before passing them off to China. In December 2018, a 35-year old Chinese national was arrested in the US for stealing trade secrets worth more than $1 billion from a US petroleum company where he worked.
According to the US Department of Justice, Hongjin Tan stole trade secrets from the petroleum company regarding the manufacture of a “research and development downstream energy market product.” He downloaded hundreds of secret files from the company's systems and intended to pass them on to a Chinese petroleum company which had offered him a job.
“The theft of intellectual property harms American companies and American workers. As our recent cases show, all too often these thefts involve the Chinese government or Chinese companies. The Department recently launched an initiative to protect our economy from such illegal practices emanating from China, and we continue to make this a top priority,” said Assistant Attorney General for National Security John C. Demers.