Former Nationwide Children's researcher sentenced in trade secret theft

By Carrie Ghose

 – 
Staff reporter, Columbus Business First

Feb 2, 2021

A former Nationwide Children’s Hospital researcher was sentenced to 30 months in federal prison and must pay $2.6 million in restitution after pleading guilty to conspiring to steal trade secrets. Her husband awaits sentencing on the same charges.

Li Chen was sentenced Monday in U.S. District Court in Columbus on a single count each of conspiring to steal trade secrets and conspiring to commit wire fraud. She pleaded guilty last summer to using the Columbus hospital’s intellectual property to found a company in China and sell biochemical kits.

Dr. Yu Zhou, Chen’s husband, pleaded guilty in December to the same charges, according to a release, and four others were dismissed.

“Chen willingly took part in the Chinese Government’s long-term efforts to steal American intellectual property. She deserves time in federal prison,” U.S. Attorney David DeVillers said in a news release.

The couple had lived in Dublin and worked for Children’s in separate research labs for 10 years, with Zhou both joining and leaving a year before his wife. They moved to San Diego in 2019, where they were arrested that July.

As part of the plea, Chen agreed to forfeit about $1.4 million cash, 500,000 shares in Avalon GloboCare Corp. and 400 shares of common stock of GenExosome Technologies Inc. – the company Zhou formed. Her prison term could have been as long as six years. The sentence added the restitution.

Zhou’s forfeiture amount is to be determined at sentencing.

Children’s separately has sued the couple and the companies, but that case is on hold pending the outcome of both criminal cases.

Avalon owned 60% of GenExosome. Avalon last year wrote down the investment’s value to zero, and said in its latest quarterly filing it believes it has a “substantial” defense against liability in the lawsuit.

The New Jersey company’s website says it is pursuing development of technology with Weill Cornell Medicine; the partnership when announced in 2018 said it was to co-develop GenExosome’s work.

Chen and Zhou studied exosomes, microscopic sacs made by cells to carry DNA, RNA and other materials. The technology to isolate exosomes from other cellular materials means they can be used for diagnosing disease.

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