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From an $80 million claim to a sting operation, infectious disease lab executive gets arrested

It's hard to believe such an incredible story made for Hollywood is just that real ...


By Julia Dudley Najieb


REEDLEY, CALIF.--State and federal officials were on the watch for what would happen next regarding the secret, infectious, disease lab discovered in Reedley, Calif. and operating from December 2022 to March 2023, owned by Universal Meditech Inc. (UMI)--what a bad move to do such a thing in a small, agricultural town, where everyone knows everyone.

According to local news outlet, Mid Valley Times, on October 19, 62 year-old Jesse Zhu, a former Clovis, Calif. resident with a British Columbia driver's license – who also goes by the names Jia Bei Zhu, Qiang He and his recent name David He – was taken in as part of a sting operation orchestrated by Reedley City Manager Nicole Zieba, Reedley Code Enforcement Officer Jesalyn Harper and five members of the Food and Drug Administration’s (FDA) criminal division in front of the "secret lab" warehouse located at 850 I Street. Federal authorities arrested him on charges of manufacturing and distributing misbranded medical devices, as well as for making false statements to investigators.


The UMI executive was caught through his own demise via the lawsuit claims he had against Fresno County ($50 million) and the city of Reedley ($30 million.) This was the door in for federal agents to catch him, using email as the only correspondence.


Tulare, Calif., medical device manufacturer, UMI, who started business in San Joaquin Valley in 2015, had a claim against both the City of Reedley and the Fresno County government for a combined total of $80 million, according to Yahoo News. The claim purported that both the city and county unlawfully destroyed their property and caused their company economic harm; the company was operating an unpermitted, secret, infectious disease lab out of Reedley, Calif. in Fresno County, under company name, "Prestige Biotech," when city code enforcement inspectors noticed code violations regarding the physical facility, regarding a water hose. From those initial inspections, a national story unraveled when local news outlet, Mid Valley Times uncovered the state of unusual affairs regarding the lab which contained hundreds of unattended, bioengineered lab mice and cannisters labeled with infectious diseases,

 

Fresno City Council passes infectious disease ordinance after secret lab scandal

Council member, Garry Bredefeld authored the ordinance with supporter of several other city council members. Watch above video excerpt.

 

According to Yahoo News, Reedley City Manager Nicole Zieba said such an intimidation tactic would not work; after the secret lab story went viral, they had not heard from the owners of the illegal medical lab for months before receiving the claim. The city and county found that the lab was being operated illegally and without permits from Reedley city officials. Zieba sent out an invoice for the amount of $310,000 which was the cost to abate the illegal, unpermitted lab which took over two and a half months to clear the contents of the facility, with the help of the Fresno County Department of Public Health.

The inflated, $80 million claim broke down the cost of each mouse to the cost of each genetically engineered virus strain that was discarded, as ordered to be confiscated by a Fresno County Court Superior judge. It was the claim that reinitiated contact with the fleeting Zhu that would lead federal authorities to his arrest.


Ironically, in 2018, UMI was publicly welcomed to the city of Fresno by Mayor Lee Brand and several connected agencies who commended the successful move to the city because of the "well-trained Fresno workforce combined with an influx of available industrial space offered at affordable prices," according to The Business Journal. In fact, the move was a tag-team effort from the City of Fresno Economic Development Department and the Fresno County Economic Development Corp., both playing the key role in relocating their manufacturing and research and development operations to the company’s 20,000 square-foot Fresno space; the location in Tulare where they started operations was too expensive for the company at the time.

Universal Meditech in 2018 relocated to Fresno's North Pointe Industrial Business Park. Photo via City of Fresno

However, UMI encountered several recalls and lawsuits throughout its manufacturing operations; the company moved operations to a Reedley location without permission of the city starting last year, under the unfamiliar company name, "Prestige Biotech," exposing the recent scandal regarding the incredible number of unattended infectious diseases labeled in jars and cannisters. City officials saw red flags when the company name was not the same as the original name of the lease. They were also concerned about the change in operations from manufacturing medical devices to then doing actual diagnostic medical work and research. Therefore, the company was unauthorized to continue such operations in the city of Fresno under unknown company name, "Prestige Biotech."


On Dec 29, 2022, UMI initiated a nationwide recall of 56,300 Skippack Medical Lab SARS-CoV-2 Antigen Rapid Test Kits. The product(s) have been found to have been distributed without appropriate premarket clearance or approval which potentially could result in inaccurate test results due to lack of performance evaluation by the FDA, as reported by the FDA. These testing kits were recalled two times.


In an online article, KVPR reported that in a judgment from January of this year in the United States Eastern District Court in Louisiana, Universal Meditech was ordered to pay around $2.2 million to Sensiva health, LLC, and Cormeum Lab Services, LLC, in owed money dating back to 2021. The original complaint stemmed from compliance issues discovered by Sensiva on “lateral flow devices,” similar to those used to test COVID-19 or other infections.

The same article also reported on the non-FDA approved medical devices from March 2022, when the company recalled over 200,000 testing kits that were distributed to Alabama, Florida, Georgia, Montana, New York and Texas. In February 2023, the company recalled around 56,000 test kits distributed in California and Texas.


The UMI executive Zhu is reported to be in the custody of federal law enforcement, where a 23-page criminal complaint against him has Zhu facing many charges, including lying to federal authorities, violating interstate commerce regulations and distributing misbranded COVID test kits, according to Mid Valley Times.


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