Case Explained: Las Vegas bio-lab: Business owners tied to house indicted on fraud charges – Legal Perspective

Two people tied to a corporation that owns the northeast Las Vegas house where law enforcement are investigating a possible biological laboratory are also facing federal charges for distributing medical test kits without regulator approval in California, court records show.

Metropolitan Police Department SWAT officers and the FBI executed a search warrant at a home on Sugar Springs Drive, near North Hollywood Boulevard and East Washington Avenue, just before 6 a.m. Saturday morning. There, investigators found unknown biological material, including vials with unknown liquids, Sheriff Kevin McMahill said at a news conference that day.

He emphasized that there was no threat to the public and the investigation was viewed as an isolated incident. McMahill said a suspect was in custody, but charges did not appear in Metro’s booking logs as of Sunday morning.

The Nevada National Guard also confirmed Saturday the civil support team specializing in weapons of mass destruction was involved in the investigation.

Police didn’t release additional details about the suspect. Local and federal officers are expected to share updates in a press conference Monday afternoon.

Investigators on Sunday had Sugar Springs Drive cordoned off while fire trucks and ambulances sat parked along the road. Investigators wearing full-body protective suits and rubber boots could be seen walking through the area. One person rolled a cooler toward the houses blocked off by law enforcement.

Alleged test kit fraud

A limited-liability company that owns the house where investigators worked is linked to Jia Bei Zhu, a Chinese national Department of Justice prosecutors have accused of distributing hundreds of thousands of misbranded COVID-19 and other testing kits as well as making false statements to federal authorities. A jury trial in U.S. District Court in eastern California is scheduled for April, court records show.

In addition, DOJ prosecutors have accused Zhu’s romantic and business partner Zhaoyan Wang, also a Chinese national, of helping Zhu facilitate the alleged fraud through two companies: Universal Meditech Inc. and Prestige Biotech Inc.

Nevada business records list Wang as an officer of the limited-liability corporation that property records show owns the house, while Zhu — also known as David He — is the registered agent.

From August 2020 through March 2023, Zhu and Wang imported hundreds of thousands of COVID-19 test kits from a Chinese company they controlled and falsely labeled the kits as being made in America, according to federal prosecutors. The two made over $1.7 million from their fraud operation, federal prosecutors said.

A federal criminal complaint filed in October 2023 said Universal Meditech’s registration with the Food and Drug Administration lapsed in December 2022 and that the company never received the necessary emergency authorization to legally manufacture and distribute COVID-19 test kits. Prestige Biotech never registered with the FDA and also never received the emergency authorization, according to the complaint.

Suspicious vials

A November 2023 report from the Select Committee on the Chinese Communist Party said Zhu operated a biological laboratory in California that contained “thousands of vials of potentially infectious agents.”

The lab located in Reedley, California — outside of Fresno — had vials labeled with the names of at least 20 potentially infectious agents including HIV, tuberculosis and the deadliest known form of malaria, according to the Congressional report. It noted that the Centers for Disease Control and Prevention did not test any of the samples in the lab.

The report said that, with the exception of apparent Ebola samples, the vials were “inconsistent with the operation of a bioweapons program” and weren’t likely to cause a mass casualty event. However, the pathogens found at the Reedley lab could have been used for more localized attacks, the report said.

Contact Spencer Levering at slevering@reviewjournal.com or 702-383-0253.