The suspect accused of running an illicit biolab in Reedley with ties to China will remain in custody a federal judge ruled Wednesday.

Officially listed in the court docket as Jia Bei Zhu, U.S. Magistrate Judge Erica Grosjean denied a motion for bail. Zhu has been in custody since his October 2023 arrest, with a judge last November initially denying release.

Zhu appeared in a red jumpsuit, with “prisoner” labeled on the back. His hair was short and graying on the sides. He wore glasses.

“It’s difficult for one magistrate to overturn another magistrate that has already made a decision. And the court didn’t feel there was enough evidence presented to overturn the prior decision. That’s fine. We’ll appeal,” Zhu’s attorney, Tony Capozzi, said after court.

Zhu faces two counts of distribution of adulterated and misbranded medical devices and one count of making false statements to the government.

He returns to court for a May 22 status hearing.

The prosecution declined to comment.

Not a Lab, Just a Warehouse: Capozzi

The case started when a Reedley code enforcement agent serendipitously noticed a hose emerging from a building in December 2022.

Capozzi challenged the government’s belief that Zhu and his companies operated a biolab, where blood and other fluid samples and 1,000 lab mice were stored. Investigators found several potentially infectious bacterial agents including E. coli, HIV, and malaria.

The attorney said the government calling the facility a biolab is “absolutely wrong.”

“The Reedley warehouse was not a lab. It was a place to store everything from the lab in Fresno, because the lease had run out that had been terminated. They moved everything to Reedley to complete the new lab in Fresno. They’ve paid over $150,000 for the new lab. And then when he was arrested, everything was terminated,” Capozzi said after court.

Zhu’s company, Universal Meditech Inc./Prestige Biotech, Inc., planned to lease a building north of Fresno Yosemite International airport. After news broke of the Reedley lab, the city of Fresno declined to issue a certificate of occupancy.

The seven-year lease with landlord Ford Tetra Partners, JV called for UMI to pay $14,313 a month, with a $100,000 security deposit.

Who is Zhu?

Attorneys argued about the mystery around Zhu’s true name. Capozzi said Zhu changed his name in China to Qiang He (pronounced “Her”). Court documents revealed Zhu filed a name change application in August 2021 in Los Angeles County Superior Court, wishing to be known as David He.

The government alleges that Zhu used the name David He to obtain a Social Security card, employment authorization, and California ID card.

In court filings, the government said Zhu moved from China to Canada in 1988, living there until 2014. He had Canadian citizenship, a driver’s license with a Vancouver, British Columbia address, and a Canadian passport.

He entered the United States after civil legal troubles in the north. Previous stories reported Zhu’s company, IND Diagnostic Inc., faced a $330 million civil judgment for technology theft related to bull semen.

In February 2021, he applied for asylum in the U.S. out of a “fear of persecution if he returns to China,” using the name of Qiang He. Federal prosecutors said he used his Chinese passport in support of the application.

Capozzi would not elaborate why Zhu is seeking asylum.

A Flight Risk?

In court, federal prosecutor Henry Carbajal argued that Zhu presented a flight risk. There were questions about his name, inconsistencies with documents and what he told Pre-Trial Services, what assets Zhu had access to, and no family members living in the U.S.

Carbajal said Zhu had a “lack of forthrightness” with federal officials conducting the investigation.

Zhaoyan Wang, who is Zhu’s business partner and mother of his baby son, left the country in September 2023, just days after federal authorities issued warrants. Prosecution and the defense argued over the timeline of when Wang purchased the one-ay ticket to China — for herself, her son, and her mother.

Court documents show Wang purchased the China Southern Airlines tickets on Sept. 3 for a Sept. 20 flight. Even if the tickets were bought before the warrants, Carbajal argued, the investigation was underway.

“You think they would stay,” Carbajal told the judge.

Capozzi told GV Wire that Wang would like to return but cannot.

“Would you come back with what they are doing to Mr. He now? I would love to have her come back. She wants to come back. But she’s afraid of what the government will do. She lives in China and she’s worried about what happens with her there if his asylum application becomes public. We’re concerned about her safety in China,” Capozzi said.

In a declaration filed with the court, Wang said she intended to purchase a round-trip ticket from China back to the United States.

Prosecutors argued that because Zhu has family outside the United States — an ex-wife and children live in Canada, and a brother lives in New Zealand, he is a flight risk.

The two sides also argued about how much time Zhu could possibly serve. Capozzi said the maximum would be up to 27 months, and he already served seven.

Carbajal countered Zhu faces up to 70 months, although four years are more likely.

“I really questioned where the prosecution was coming up with those numbers,” Capozzi said.

Using China-Funded Property as Collateral?

Zhu set up businesses in the United States, funded by one of his companies from China — Ai De Diagnostics, listed as a medical device distribution company, the government said. The company supplied $850,000 in funding for Zhu’s Las Vegas-based company, David Destiny Discovery, LLC (3D) to purchase property.

Zhu’s attorneys offered the Las Vegas property — which serves as Zhu’s primary residence — and another 3D owned property in Clovis as collateral. The Clovis property is rented for $3,500 a month, records show.

The attorneys also argued over who really controls 3D. In her declaration, Wang said she managed the company, with the primary purpose of dealing with Nevada real estate. Prosecutors said Zhu is still listed as the legal agent of the company in Nevada corporate records, and has access to the bank accounts.

Prosecutors objected to the bail offering in court documents.

“It appears Zhu tried to hide these properties and his business assets. Given that those efforts have been unsuccessful, Zhu now characterizes the properties and businesses as belonging to others that charitably offer them for his bail. Even if this were the case, loss to 3D would not be loss to Zhu and thus is not adequate compulsion for Zhu to stay in the country and face the charges,” prosecutors wrote.

Wang also revealed in her declaration that UMI has two shareholders, Qindago, China-based Guangdi Packaging Co., Ltd. (70%), and Nevada-registered MedSauce (30%).

“I am the company manager (Managing Director). The main investment comes form China. The technology comes from China and Canada,” Wang wrote.

Attorney Kevin Little Says Civil Lawsuits Coming

Capozzi argued to no avail that several claims against the government and a forthcoming civil rights lawsuit would keep Zhu in America.

Grosjean accepted the prosecution’s argument that lawsuits can be dismissed are unlikely to motivate Zhu to stay.

Fresno attorney Kevin Little plans to file the lawsuit on Friday, both for Zhu’s companies, and as a individual, Little said.

The corporate case will revolve around violations of the 5th and 14th amendments, “not to have its property baselessly seized and destroyed,” Little said.

The civil rights lawsuit will deal with Zhu’s Oct. 19, 2023 arrest by FDA officials.

An FDA investigation report accused Zhu of resisting arrest, causing injury to Zhu.

“(Agents) were able to push Zhu forward onto his knees, and the momentum of going to his knees brought Zhu into a flat prone position on his stomach and chest on the ground in a relatively slow motion (there was no abrupt impact on the ground),” the report said.

When the agents finally cuffed Zhu, they noticed cuts to his face. The report indicated the cuts came from Zhu’s metal framed glasses and contact with the pavement.

Zhu was treated on the scene by medical personnel and taken to the hospital at his request. He would only respond to questions from federal officials and medical staff by saying “attorney,” the report said.

Capozzi said Zhu was confused because of the language difference.

He also told the court his client is “scared to death” because he is Chinese with limited English skills.

“It’s been difficult at the jail. He’s the only Chinese person out there that doesn’t speak English. It’s very difficult. Many of the people just look at him as someone different. He hasn’t been beat up, but there’s been a number of fights in his area of the jail, and he’s very concerned. But the government is not concerned about that,” Capozzi said.