Score:   1
Docket Number:   WD-VA  7:17-cr-00073
Case Name:   USA v. Zhang
  Press Releases:
Roanoke, VIRGINIA – Yiheng Percival Zhang, a former Virginia Tech professor studying artificial sweeteners, was sentenced last week in U.S. District Court to time served, which included incarceration for approximately three months, and home incarceration for approximately two years, First Assistant United States Attorney Daniel P. Bubar announced today.  Zhang was convicted of committing federal grant fraud, making false statements and obstruction by falsification following a bench trial in September 2018.

Zhang, 47, of Blacksburg, Va., was found guilty of one count of conspiracy to defraud the United States, three counts of making false statements, and one count of obstruction by falsification. 

“The government has an obligation to ensure that the limited funds from these important programs are being used for legitimate research projects that enhance innovation and technological advancement,” First Assistant United States Attorney Bubar said today. “I am proud of the work of the men and women with the National Science Foundation (NSF), Department of Energy, and Federal Bureau of Investigation for conducting a thorough investigation.”

“The Small Business Innovation Research Program is a valuable tool in advancing NSF’s mission to promote the progress of science by increasing opportunities for small businesses to undertake cutting-edge scientific research, and it is essential to protect the integrity of this program,” stated National Science Foundation Inspector General Allison Lerner.  “The NSF Office of Inspector General is committed to vigorously pursuing oversight of these taxpayer funds and I commend the U.S. Attorney’s Office and our investigative partners for their support in this effort.”

“The Department of Energy, Office of Inspector General works diligently to protect the integrity of the SBIR and STTR programs. These programs are critically important in the generation of scientific breakthroughs and technological innovations.  Those who defraud our programs and steal our innovations are a threat to our nation,” said Department of Energy Inspector General Teri L. Donaldson. “We will continue to work with our law enforcement partners to hold all who violate the integrity of our Nation's scientific programs accountable.  We appreciate the efforts of the U.S. Attorney's Office and our law enforcement partners on this joint investigation.”  

“The FBI is committed to working with our federal, state, and local partners to protect the integrity of funding programs that promote the development of advanced technology and strengthen the U.S. economy,” said David W. Archey, Special Agent in Charge of the FBI’s Richmond Division. “We are grateful for the partnership of the United States Attorney’s Office, the Department of Energy Inspector General, the National Science Foundation Inspector General, the Blacksburg Police Department and the Virginia Tech Police Department during this investigation.”

According to evidence presented at trial, Zhang, who at the time of the offenses was a biological systems engineering professor at Virginia Tech, founded Cell-Free Bioinnovations, Inc. (“CFB”), a research firm located in Blacksburg, Virginia. CFB relied exclusively on federal grants for funding its research activities. Zhang began working as a paid researcher for the Tianjin Institute of Industrial Biotechnology, Chinese Academy of Sciences by, at least, 2014.  In 2015, Zhang caused fraudulent grant proposals to be submitted to the NSF under the Small Business Innovation Research Program (“SBIR”). Evidence presented at trial indicated grant funds obtained would be used for research Zhang knew had already been done in China. Zhang intended to use the grant funds for other CFB projects rather than for the projects for which the funds were requested. To obstruct the investigation, Zhang submitted falsified timesheets to government investigators.

The investigation of the case was conducted by the National Science Foundation-Office of the Inspector General, Department of Energy-Office of the Inspector General, and the Federal Bureau of Investigation, and with the assistance of the Blacksburg Police Department, and the Federal Bureau of Investigation, with the assistance of the Blacksburg Police Department and the Virginia Tech Police Department.  Assistant United States Attorneys Kate Rumsey and Randy Ramseyer, and former Assistant United States Attorney Steve Pfleger prosecuted the case for the United States.

Roanoke, VIRGINIA – A former Virginia Tech professor studying artificial sweeteners was found guilty last week of conspiring to commit federal grant fraud, making false statements and obstruction by falsification, First Assistant United States Attorney Daniel P. Bubar announced today.

Chief Judge Michael F. Urbanski of the Western District of Virginia released his Findings of Fact and Conclusions of Law February 20, 2019 in which he found Yiheng Percival Zhang, 47, of Blacksburg, Va., guilty of one count of conspiracy to defraud the United States, three counts of making false statements, and one count of obstruction by falsification. The ruling comes following a September 2018 bench trial in U.S. District Court in Roanoke.

“This verdict shows our commitment to hold individuals accountable who seek to fraudulently obtain federal funds.  Mr. Zhang used his position of prominence to unlawfully seek money from federal grant programs and will now pay for it,” FAUSA Bubar said today. “I am proud of our team of investigators and prosecutors that worked tirelessly to ensure that tax payer dollars are not being misused.” 

“Small Business Innovation Research (SBIR)  and Small Business Technology Transfer (STTR) grants are intended to promote scientific innovation in the private sector by providing capital to entrepreneurial teams at a very early stage when the technological risk associated with their ideas generally precludes private sector funding,” said Allison Lerner, Inspector General for the National Science Foundation (NSF). “The NSF Office of Inspector General remains committed to ensuring the integrity of the SBIR/STTR programs by holding accountable those who attempt to hide behind sophisticated schemes aimed at diverting Federal research funds. I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”

According to evidence presented at trial, Zhang, who at the time of the offenses was a biological systems engineering professor at Virginia Tech, founded Cell-Free Bioinnovations, Inc. (“CFB”), a research firm located in Blacksburg, Virginia. CFB relied exclusively on federal grants for funding its research activities. Zhang began working as a paid researcher for the Tianjin Institute of Industrial Biotechnology, Chinese Academy of Sciences by, at least, 2014.  In 2015, Zhang caused fraudulent grant proposals to be submitted to the NSF. Evidence presented at trial indicated grant funds obtained would be used for research Zhang knew had already been done in China. Zhang intended to use the grant funds for other CFB projects rather than for the projects for which the funds were requested. To obstruct the investigation, Zhang submitted falsified timesheets to government investigators.

The investigation of the case was conducted by the Department of Energy-Office of the Inspector General, the Federal Bureau of Investigation, and the National Science Foundation-Office of the Inspector General with the assistance of the Blacksburg Police Department and the Virginia Tech Police Department.  Assistant United States Attorneys Steve Pfleger and Randy Ramseyer prosecuted the case for the United States.

Roanoke, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke has charged a former engineering professor at Virginia Tech in an indictment returned yesterday, United States Attorney Rick A. Mountcastle announced.

 

Yiheng Percival Zhang, 46, of Blacksburg, Va., is charged with one count of conspiring to defraud the United States, three counts of making false statements within the jurisdiction of the United States, and three counts of making false claims to the United States.

 

Zhang, a former professor of Biological Systems Engineering at Virginia Tech, was also the Chief Scientific Officer of Cell-Free Bioinnovations (CFB). According to the indictment, CFB applied for grant funding available through the National Science Foundation (NSF) under the premise that the money would be used for research on certain projects. However, it is alleged that Zhang intended for the grant funds to be used for other purposes.

 

The indictment alleges that Zhang, in an email to a CFB employee, stated:

 

“What we expect here is to get this free money and use half of money to do what you want do to do – make sweeteners. Another half will be used to pay VT graduate students to finish this project.”

 

 

The grants that are the subject of the indictment total $600,000.

 

The case is being investigated by the National Science Foundation – Office of Inspector General, the Department of Energy- Office of Inspector General and the Federal Bureau of Investigation. The Blacksburg Police Department and the Virginia Tech Police Department provided assistance in the execution of search warrants. The case is being prosecuted by Assistant United States Attorney Randy Ramseyer       

 

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1AOK93kfwEvTA3vPPSGCtDF4OYfsvsN-6Ayo1sGvM2Rs/edit#gid=0
  Last Updated: 2020-10-22 01:57:10 UTC
Description: The fiscal year of the data file obtained from the AOUSC
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Description: The date when a case was first docketed in the district court
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Description: The date of the last action taken on the record
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Description: The date upon which judicial proceedings before the court concluded
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Data imported from FJC Integrated Database
Magistrate Docket Number:   WD-VA  7:17-mj-00093
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
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Description: The code of the federal judicial district where the case was located
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Description: The code of the district office where the case was located
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Description: Docket number assigned by the district to the case
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Description: A unique number assigned to each defendant in a case which cannot be modified by the court
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Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
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Description: Case type associated with a magistrate case if the current case was merged from a magistrate case
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Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
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Description: A concatenation of district, office, docket number, case type, and reopen sequence number
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Description: The docket number originally given to a case assigned to a magistrate judge and subsequently merged into a criminal case
Format: A7

Description: A unique number assigned to each defendant in a magistrate case
Format: A3

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
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Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
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Description: The four digit D2 offense code associated with FTITLE1
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Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20

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Description: The four digit D2 offense code associated with FTITLE2
Format: A4

Description: A code indicating the severity associated with FTITLE2
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the third highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE3
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Description: The four digit AO offense code associated with FTITLE3
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Description: The four digit D2 offense code associated with FTITLE3
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Description: A code indicating the severity associated with FTITLE3
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Description: The title and section of the U.S. Code applicable to the offense committed which carried the fourth highest severity
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Description: The four digit AO offense code associated with FTITLE4
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Description: The four digit D2 offense code associated with FTITLE4
Format: A4

Description: A code indicating the severity associated with FTITLE4
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the fifth highest severity
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Description: A code indicating the level of offense associated with FTITLE5
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Description: The four digit AO offense code associated with FTITLE5
Format: A4

Description: The four digit D2 offense code associated with FTITLE5
Format: A4

Description: A code indicating the severity associated with FTITLE5
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
F U C K I N G P E D O S R E E E E E E E E E E E E E E E E E E E E