California man convicted of multimillion-dollar COVID-19 test fraud scheme

A federal jury convicted a California man linked to an underground biolab of running a multimillion-dollar COVID-19 test fraud scheme, prosecutors said.

Jia Bei Zhu, 64, a Chinese national, was found guilty on all 12 counts after a two-week trial in Sacramento. The charges included conspiracy, wire fraud, distributing misbranded medical devices and lying to the Food and Drug Administration, according to the U.S. Attorney’s Office.

Prosecutors said Zhu operated through his Fresno company, Universal Meditech Inc., to sell more than one million faulty COVID-19 test kits across the United States. The operation brought in nearly $4 million during the pandemic's peak.

"This verdict holds the defendant accountable for actions that exploited a public health crisis for his own gain," U.S. Attorney Eric Grant said in a statement. "He deliberately deceived the public by repackaging low-quality, foreign-made test kits at a time when accuracy and reliability were critical."

Authorities said the tests were falsely marketed as FDA-approved, made in the USA and produced in certified laboratories. Prosecutors called those claims fabricated.

Trial evidence showed Zhu and his associates imported inexpensive COVID-19 tests from China, repackaged them and resold them under false pretenses. Victims testified that many kits lacked basic components and sometimes did not work at all.

Employees told jurors they received instructions to lie to customers and feared retaliation for refusing. Most workers had no medical or scientific background and came from jobs in retail and childcare.

Federal investigators described the operation as driven by deception, from misleading online marketing to false statements to regulators.

"The defendant’s scheme undermined public health during a critical time," said FDA Special Agent in Charge Robert Iwanicki.

Zhu previously attracted national attention for his ties to a shuttered warehouse in Reedley, California. Officials called it an illegal makeshift biolab that sparked concerns over potential biohazards.

The Reedley site drew scrutiny after local and federal officials discovered lab materials, mice and improperly stored substances. Officials later said those materials did not pose a risk to humans and were unrelated to the fraud charges.

Federal agencies including the FDA, CDC and FBI determined the materials stemmed from a failed effort to manufacture COVID-19 tests and presented no public threat.

Prosecutors noted that UMI’s Fresno facility could not manufacture tests and amounted to an unsanitary warehouse below established standards.

Zhaoyan Wang, Zhu’s alleged romantic and business partner, faced charges but fled the United States before arrest. She remains a fugitive believed to be in China.

Prosecutors said the pair tried to avoid detection by moving the operation and rebranding the company, but federal investigators caught up. In one case, Zhu lied to agents about his identity, claiming to be someone else who had just arrived in the U.S.

Zhu faces sentencing in August and could receive decades in prison on maximum penalties. Each wire fraud count carries up to 20 years.

Federal officials said the case shows their resolve against pandemic-related fraud.

"Our office remains committed to prosecuting those who endanger the public through fraud," Grant said.

Fox News' Lee Ross and Bradford Betz contributed to this report.