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Chinese national pleads guilty to stealing trade secrets from Nationwide Children’s Hospital

Nationwide Children's Hospital in Columbus (Google Maps/Released)

A Chinese national admitted Thursday in federal court to stealing scientific trade secrets for personal gain and for her country while she worked as a researcher at Nationwide Children’s Hospital.

Li Chen, 47, who had lived in Dublin, Ohio, pleaded guilty to charges of conspiracy to commit theft of trade secrets and conspiracy to commit wire fraud. The plea was entered via video conference with Judge Sarah D. Morrison of the U.S. District Court for the Southern District of Ohio in Columbus. Her sentencing date has not yet been set.

“Chen betrayed her employer of 10 years by stealing trade secrets from this American institution and transferring them to China after receiving payments from the Chinese government,” said David M. DeVillers, the U.S. Attorney in Columbus.

Chen and her husband, accused co-conspirator Yu Zhou, worked for 10 years in separate medical research labs at the Research Institute at Nationwide Children’s Hospital. Zhou worked there from 2007 to 2017 while Chen was employed from 2008 to 2018.

The couple was arrested in July 2019 in California, charged with conspiring to steal at least five trade secrets related to exosome research while they were employed at Nationwide Children’s. Zhou’s case is still pending.

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Exosomes play a key role in the research, identification and treatment of medical conditions, including: necrotizing enterocolitis ( a condition found in premature babies), liver fibrosis and liver cancer.

Chen admitted that she conspired to steal and monetize one of the trade secrets by creating and selling “isolation kits.” Chen helped to start a company in China to sell the kits and received benefits from the Chinese government, according to the plea agreement.

There was also evidence that Chen was following a method that has been used by other Chinese nationals to transfer foreign research and technology to the Chinese government, a press release from the U.S. Attorney’s office states.

As part of her plea, Chen has agreed to forfeit approximately $1.4 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies, Inc.

Chris Hoffman, the FBI Special Agent in Charge in Cincinnati, said that Chen was a trusted researcher at Nationwide Children’s, conducting “cutting-edge, U.S. government-funded research.”

“With her guilty pleas, she admits she abused this trust to establish a company in China for her own financial gain,” Hoffman said.

DeVillers said that Nationwide Children’s took reasonable measures to protest its intellectual property and cooperated with the investigation.

Hoffman said the FBI is committed to working with institutions, like Nationwide Children’s, to protect innovations in science and technology.

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©2020 The Columbus Dispatch (Columbus, Ohio)

Distributed by Tribune Content Agency, LLC.