Bloomberg News

Grand Jury Indicts Man Accused of Drug Theft for China

April 11, 2013

A Medical College of Wisconsin researcher accused of stealing a developmental cancer drug to deliver it to a Chinese university was indicted by a U.S. grand jury for computer tampering and lying to federal agents.

Hua Jun Zhao is scheduled to be arraigned today in federal court, Dean Puschnig, a spokesman for Milwaukee U.S. Attorney James L. Santelle, said by phone today.

Zhao was accused of economic espionage in a criminal complaint filed on March 29. Gerald Shinneman of the Federal Bureau of Investigation said in an accompanying affidavit that surveillance cameras showed Zhao to be the only person to enter and leave a medical college office at the time three vials of the drug vanished in February.

“I did not expect to see different charges than contained in the criminal complaint, but we’re not privy to what happened in the grand jury,” Zhao’s defense lawyer, Juval Scott, said today in a phone interview. “We’re looking forward to getting information from the government and starting our own investigation.”

Scott said her client will enter a plea of not guilty this afternoon. She said prosecutors might return to the grand jury to seek other charges.

The vials, containing a powdery patented substance identified only as C-25, had a value of about $8,000 according to the FBI affidavit.

Zhejiang University

“The investigation has revealed that Zhao may have used his employment and position at MCoW to illegally acquire patented research material and taken steps to provide that material to Zhejiang University,” Shinneman said.

The grand jury indictment was returned on April 9 and posted on the federal court’s electronic docket yesterday.

In it, Zhao is accused of knowingly initiating a computer program, code and command that “intentionally caused and attempted to cause damage” to a medical college computer. That crime is punishable by as long as 10 years in prison.

He’s also charged with lying to the FBI in the course of its investigation of the drug’s disappearance about whether he had gained access to a college computer and deleted files related to the missing compound. That crime is punishable by as long as five years in prison.

The case is U.S. v. Zhao, 13-cr-00058, U.S. District Court, Eastern District of Wisconsin (Milwaukee).

To contact the reporters on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net; Marie Rohde in Milwaukee at fmarierohde@gmail.com.

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


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