Yu Zhou, Exosome Trade Secrets Theft, Ohio 2020

Columbus, Ohio – A former researcher at Nationwide Children’s Hospital was sentenced to 33 months in prison for conspiring to steal exosome-related trade secrets and sell them to China.

Yu Zhou, 51, pleaded guilty in December 2020 to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for his own personal financial gain.

Zhou also conspired to commit wire fraud. According to court documents, Zhou and his co-conspirator and wife, Li Chen, 48, worked in separate medical research labs at the Research Institute for 10 years each. They pleaded guilty to conspiring to steal at least five trade secrets related to exosome research from Nationwide Children’s Hospital.

Exosomes play a key role in the research, identification and treatment of a range of medical conditions, including necrotizing enterocolitis, liver fibrosis, and liver cancer.

Zhou and Chen conspired to steal and then monetize one of the trade secrets by creating and selling exosome ‘isolation kits.’ Zhou’s research at Nationwide Children’s included a novel isolation method in which exosomes could be isolated from samples as small as one drop of blood.

As part of their convictions, the couple will forfeit approximately $1.45 million, 500,000 shares of common stock of Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc. They were also ordered to pay $2.6 million in restitution.

Zhou and Chen started a company in China to sell the kits. The couple received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China.

The defendants were arrested in California in July 2019 and their case was unsealed in August 2019 when they appeared in federal court in Columbus.

Yu Zhou’s sentence was announced today by Acting U.S. Attorney Vipal J. Patel for the Southern District of Ohio. Zhou was sentenced by U.S. District Judge Sarah D. Morrison.

The couple’s scheme was encouraged and enabled by a series of Chinese Government programs which incentivize thievery in an attempt to supplement China’s own research and development goals on the back of American ingenuity and investment.

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