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NIH-Grant Researchers Charged by U.S. in Bribe Scheme

May 20 (Bloomberg) -- Three employees of New York University’s Langone Medical Center were charged in a bribery scheme tied to research on magnetic-resonance imaging funded with a $4 million grant from the U.S. National Institutes of Health.

While working on the NIH project at the New York-based university’s research center, the three were secretly affiliated with United Imaging Healthcare Inc., a Chinese medical-imaging company, and Shenzhen Institute of Advanced Technology, a Chinese government-supported research institution that competes with the NIH, the U.S. said.

The three defendants allegedly conspired to obtain financial benefits from the Chinese company in exchange for research and non-public information being developed at NYU, according to Manhattan U.S. Attorney Preet Bharara’s office.

“This is a case of inviting and paying for foxes in the henhouse,” Bharara today said in a statement. “These defendants allegedly colluded with representatives from a Chinese governmental entity and a direct competitor of the university for which they worked to illegally acquire NIH-funded research for the benefit of those entities.”

Those charged include Yudong Zhu, 44, of Scarsdale, New York, a Chinese national who is an associate professor at the university; Xing Yang, 31, of Hartsdale, New York, a Chinese citizen employed by the university as a research engineer; and Ye Li, 31, of also Hartsdale, who worked at the university as a post-doctoral fellow, according to the criminal complaint made public today.

Radiology Department

All three worked at the medical center’s radiology department, a spokeswoman for the university said in an e-mailed statement.

“NYULMC is deeply disappointed by the news of the alleged conduct by its employees,” Kathy Lewis, the spokeswoman, said in the statement. “Through our internal review process, we became aware of possible irregularities pursuant to research being conducted through a grant from the NIH to develop new MRI technologies. As a result of our investigation, we alerted the U.S. Attorney’s Office and they pursued the case. Three researchers have been suspended and we continue to cooperate fully with the U.S. Attorney’s investigation on this matter.”

Lewis declined to comment further, saying the investigation is continuing.

Zhu and Yang were arrested yesterday without incident by agents with the Federal Bureau of Investigation, said Peter Donald, a spokesman for the FBI’s New York office.

Li is believed to have flown to China before the charges were brought and remains at large, Donald said.

Commercial Bribery

All three were charged with a count of commercial bribery conspiracy, which carries a term of as long as five years in prison, the U.S. said. Zhu is also charged with one count of falsification of business records in connection with the NIH grant, which carries a term of as long as 20 years in prison, Bharara’s office said.

An unidentified executive at the Chinese company, described by the U.S. as the chief executive officer of the research and development center for advanced medical devices, is an uncharged co-conspirator who’s cooperating with the federal investigation, Bharara’s office said.

Prosecutors said NYU officials conducted an investigation and that after confronting Zhu, he admitted he was a member of a Chinese team working on innovations of MRI equipment research with the uncharged co-conspirator.

Representatives of United Imaging Healthcare in China didn’t immediately respond to a phone call outside regular business hours seeking comment about the U.S. allegations.

U.S. Magistrate Judge Sarah Netburn agreed to allow both Zhu and Yang to be released on bond, noting that neither man fled the U.S. after learning that NYU had started an investigation.

Zhu, who his lawyer Robert Baum said has been in the U.S. for at least 22 years and has degrees from Vanderbilt University and Stanford University, was released on a $200,000 personal recognizance bond secured by $20,000 in cash.

Yang, who prosecutors said was recruited by Zhu to come to the U.S., was released on a $100,000 bond secured by $5,000 in cash and ordered to remain at home under electronic monitoring. Yang’s wife is 8 1/2 months pregnant and Netburn said he had no incentive to flee the U.S. as she is about to give birth.

Baum and Fred Cohn, a lawyer for Yang, declined to comment after court.

The case is U.S. v. Zhu, 13-mag-01309, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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