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IN-DEPTH: More Details on Black Market Chinese Biolab Surface as Politicians Point Fingers

IN-DEPTH: More Details on Black Market Chinese Biolab Surface as Politicians Point Fingers

A warehouse in Reedley, Calif., in October 2020. (Google Maps/Screenshot via The Epoch Times)

Brad JonesLear Zhou

Brad Jones & Lear Zhou

8/11/2023

Updated: 8/22/2023

Two California-based legislators are calling for an investigation into a secret Chinese-owned biolab discovered in Reedley, California, and how the company that owned it was approved for government loans and tax credits amounting to more than $500,000.
House Speaker Kevin McCarthy (R-Calif.) and Rep. Jim Costa (D-Calif.), who represent congressional districts in California’s Central Valley, wrote a letter to the Pandemic Response Accountability Committee seeking a probe into how and why Universal Meditech Inc. was granted two Payment Protection Program (PPP) loans of $74,912 each in April 2020 and February 2021.
Universal Meditech was also awarded a $360,000 tax credit (pdf) in 2018 under California Gov. Gavin Newsom’s CalCompetes GO-Biz program, although the company failed to meet guidelines and never actually received those funds.
The black market lab at 850 I St. was discovered last December, when a code enforcement officer for the City of Reedley’s fire department noticed a green garden hose protruding from the back of a warehouse. Jesalyn Harper told The Epoch Times that she inspected the building after receiving an anonymous complaint about a possible business operating in the warehouse, which was thought to be vacant at the time.
Thousands of vials of bacterial and viral agents, including coronavirus. chlamydia, E. coli, streptococcus pneumonia, HIV, hepatitis, herpes, rubella, and malaria, were discovered at the site, raising grave concerns about biosecurity.
The warehouse space housed nearly 1,000 lab mice, of which 200 were found dead. The rest of the mice—except for 10 samples stored in a refrigerated facility—were euthanized and incinerated.
The company, which changed its name to Prestige Biotech before moving to Reedley from Fresno, is believed to have produced COVID-19 and pregnancy test kits.
Inside Prestige Biotech's warehouse in Reedley, Calif., where furniture, medical devices, and other materials were improperly stored. (Nicole Zieba, Reedley City Manager)

Inside Prestige Biotech's warehouse in Reedley, Calif., where furniture, medical devices, and other materials were improperly stored. (Nicole Zieba, Reedley City Manager)

A spokesperson for GO-Biz told The Epoch Times in an Aug. 10 email that the company “was found to be in material breach of their tax credit agreement and on June 15, 2023, it was terminated.”
“They never received a single dollar,” the spokesperson said.
In 2019, when the tax credit agreement was signed by Cheryl Akin, deputy director of the governor’s Office of Business and Economic Development, and Universal Meditech CEO Zhaoyan Wang, the company was operating as a licensed business in California and agreed to hire full-time employees and invest in intellectual property and tenant improvements as part of their expansion in Fresno in exchange for the tax credit, according to the spokesperson.
Investigations involving city, county, state, and federal authorities, including the FBI and U.S. Centers for Disease Control and Prevention (CDC), have alarmed residents in this small city about 25 miles southeast of Fresno.
Joe Prado, assistant director of the Fresno County Department of Health, released a chronology of events regarding the company and the biolab at a County Board of Supervisors meeting on Aug. 8. He offered more details and photographs of biologic materials that were found inside the warehouse, while stressing that the facility doesn’t pose an imminent threat to public health.
During the first week of July, the county removed 126 44-gallon containers and one 38-gallon container, but then discovered another 10 44-gallon containers of “biologicals,” he said.
“So, think of this warehouse. It is packed ... to the ceiling with boxes,” Mr. Prado said. “And everywhere, as we’re moving things around, we’re finding more chemicals, we’re finding more biologicals; we’re having to deal with more issues as we go through this cleanup.”
Inspections of the site also uncovered 35 freezers and refrigerators, according to court documents. They contained biological material, including blood, tissue, serum, bodily fluid samples, medical waste, and infectious agents.
All the freezers and refrigerators were full of blood and tissue samples, Mr. Prado said.
“Those were a particular concern to us,” he said.

Public Disclosure

The FBI told all agencies on Dec. 21, 2022, to “stand by” while it assessed whether a federal investigation would be conducted, Mr. Prado said.
Federal and state authorities told the city and county not to speak publicly about the continuing investigation as a matter of protocol, he said.
“They were making it very clear to us we cannot speak on this,” he said. “They’ve made that clear pretty much from day one.”
Reedley City Manager Nicole Zieba claimed during the meeting that local authorities wanted to disclose information about the biolab discovery sooner but were told not to.
“We had to be able to come out with as much information as we possibly could, but when the FBI and the CDC and everybody else in the alphabet soup of state and federal agencies tells you we cannot even comment whether we’re doing an investigation, you cannot comment,” she said. “When they tell you that, you’re not going to defy the FBI.”
Ms. Zieba told the board there’s good reason to disclose information now to debunk myths about the facility, about which “conspiracy theories abound,” she said.
One such rumor in Reedley is that a grocery store across the street from the warehouse was shut because mice got out and infected the supermarket, she said.
The exterior of a suspected biolab in Reedley, Calif., on July 31, 2023. (Nathan Su/The Epoch Times)

The exterior of a suspected biolab in Reedley, Calif., on July 31, 2023. (Nathan Su/The Epoch Times)

“No, no, no, no, no. The roof is collapsing in the supermarket and it shut a year prior to this lab coming to Reedley. So, it really behooves us to get out in front of the media now to debunk these myths, because the conspiracy theorists are having a field day with it,” she said.
State and local authorities believe the company, Prestige Biotech wasn’t operating as a laboratory but was instead used as a storage site for equipment, medical devices, chemicals, and biologic materials such blood, urine, and tissue samples.
“I have heard everything,“ Ms. Zieba said. ”I have watched a local politician on national television talking about communist Chinese labs that are manipulating viruses. We had to be able to come out to the public to say do not listen to the conspiracy theorists.
“Do we have a problem? Absolutely. Are they Chinese nationals? Absolutely. Are they manipulating viruses? No evidence of that.”
She praised Reedley and Fresno County officials for how they handled the crisis.
“This little David city took down Goliath with a green garden hose,” she said. “I’m incredibly proud of our city, our code enforcement officer, and I will stand up anytime and say that we did everything in our power to keep the public safe.”

‘Bad’ Company

Universal Meditech was owned by a group of Canadian and Chinese investors and specialized in research, development, and the assembly of diagnostic test kits used in dairy cattle production, according to a 2015 article published in the Visalia Times Delta.
“This was ... a bad actor company that was kicked out of Canada,” Ms. Zieba said. “They went to Texas. They got kicked out of Texas. They came to California, recruited with tax credits by the way.”
In California, the company set up operations in Fresno, then moved to Tulare, went back to Fresno, and then moved to Reedley, Ms. Zieba said.
After an electrical fire caused extensive damage at its leased Fresno facility, the company—facing financial setbacks and threat of eviction—moved to Reedley when one of two businesses leasing the facility agreed to sublease a vacant warehouse to Prestige Biotech, Ms. Harper, the code enforcement officer, told The Epoch Times.
Public records, specifically Commercial & Government Entity reports, show the business was registered in Tulare City, California, but that registration had expired by March 23, 2017. The document lists a person named Wendy Chen as the contact person for the business at the time.
The company’s website posted a notice on Jan. 16, 2023, recalling 56,300 Skippack Medical Lab SARS-CoV-2 Antigen Rapid Test Kits that were manufactured from October to December 2021.
The products were distributed in January 2022 in California and Texas “without appropriate premarket clearance or approval which potentially could result in inaccurate test results due to lack of performance evaluation by the FDA,” the announcement stated.
Public records show the company was first registered in Nevada to Zhaolin Wang—also known as Lynn Warner—on April 3, 2019, before Xiuqin Yao, who is based in China and doesn’t speak English, took over as president on May 28, 2021, Ms. Harper said.
Harper interviewed Ms. Wang and a man named David He, who both said they were consultants to Ms. Yao.
The company hasn’t cooperated well with authorities in the ongoing investigation, which has resulted in the abatement warrants, Harper said.

Blame Game

Fresno County Supervisor Nathan Magsig blamed the California Department of Public Health (CDPH) for allegedly advising the county to suppress information about the lab, and keeping the public in the dark.
At the Aug. 8 meeting, Mr. Magsig raised the issue of a “holding statement” that was prepared by the county and intended to be released in case the public or media began to ask questions about activity at the warehouse.
Mr. Magsig told The Epoch Times on Aug. 9 the county wanted to release information about the lab discovery to the public, but “were told not to” by the state, a claim that CDPH has flatly denied.
County spokeswoman  Sonja Dosti had prepared the “holding statement” and sent it to CDPH suggesting the information be ready for release in case the public and media asked questions about activity at the warehouse as investigations and cleanup operations began.
The CDPH “basically redacted a bunch of it and turned it into some a document that said nothing,” Mr. Magsig said.
Emails exchanged between the County and CDPH obtained by The Epoch Times show that CDPH did suggest a shortened and revised holding statement.
The county anticipated questions from the public and media with investigators and cleanup crews going in and out of the warehouse, and wanted to prepare the holding statement, Ms. Dosti told The Epoch Times.
“We had some concerns about wanting the holding statement to be a bit more detailed, to share more information, because people were starting to go in and out with PPE [Personal Protective Equipment] and we anticipated that there may be questions ... and so we raised those concerns, and we also pitched a more detailed holding statement,” Ms. Dosti said.
The interior of a suspected biolab in Reedley, Calif., on July 31, 2023. (Courtesy of City of Reedley)

The interior of a suspected biolab in Reedley, Calif., on July 31, 2023. (Courtesy of City of Reedley)

But, Ali Bay, CDPH communications director, said in a statement emailed to The Epoch Times the agency never asked Fresno County to withhold a statement.
“The claims being made by a county supervisor that the state asked for a news release be withheld are patently false,” she said. “CDPH worked closely with the county to draft a holding statement should questions arise, and helped ensure that information was accurate and didn’t interfere with the state investigation.”
The state worked with local and federal authorities to protect public safety and public health throughout the course of the ongoing investigation to swiftly shut down the unlicensed warehouse, according to Ms. Bay.
Fresno City Councilman Garry Bredefeld panned public officials at a July 31 press conference for not telling the public about the biolab until eight months after it was uncovered when the Mid Valley Times broke a story on the unlicensed lab.
Mr. Bredefeld told The Epoch Times on Aug. 9, that withholding information about the lab for that long shows an “overt disrespect” for the public.
“Certainly, when there’s an investigation, you don’t want to do anything to compromise it but at what point were they going to tell the public?” he asked.
“People need to know when there’s some kind of danger in their community, and when you have the Wuhan 2.0-type lab ... in your backyard,” he said. “It’s a complete disaster. They owe Fresno County residents an apology rather than trying to justify his terrible decision.”
Mr. Bredefeld called the news conference when the story came out in the local newspaper because people were calling him and asking questions about the lab, he said.
And, although he has been criticized for allegedly putting out inaccurate information on the mice, he cited court documents stating that Ms. Wang told investigators the lab mice “were genetically engineered to catch and carry the COVID-19 virus.”
A sign on the wall of a suspected biolab in Reedley, Calif., on July 31, 2023. (Nathan Su/The Epoch Times)

A sign on the wall of a suspected biolab in Reedley, Calif., on July 31, 2023. (Nathan Su/The Epoch Times)

Mr. Bredefeld, who is running against incumbent Supervisor Steve Brandou for the District 2 Board of Supervisors seat, countered criticisms directed at him for holding the press conference.
At the Aug. 8 meeting, Mr. Brandou thanked Ms. Zieba and Mr. Prado for the data on the biolab.
“And yet I don’t believe it will deter for one minute those who are politically motivated and the sycophants that follow them to try to tear down and destroy elements of their community in their own political efforts.”
Mr. Bredefeld said the thinly veiled “attack” on him and his supporters was “a complete disgrace.”
Supervisor Buddy Mendes accused Mr. Bredefeld of using McCarthy-era tactics for his own political gain.
“This whole deal with the councilman reminded me of Joe McCarthy in the ‘50s, who just launched accusations at hearings in the Senate. They were some of the first TV hearings in the Senate, and nine times out of 10, it was all false and he ruined a lot of people’s lives,” Mr. Mendes said.
“These are dangerous tactics.”
But Mr. Bredefeld told The Epoch Times he won’t bow to political attacks or back down from his pursuit of transparency.
“You have politicians ... on the Board of Supervisors who don’t respect the right of their constituents to know [about] these kinds of dangers, attacking me—one calling me Joe McCarthy and the other one ... calling his constituents and my constituents sycophants because they want to know about a Chinese lab in their community,” he said. “It’s cowardly. It’s weak. It’s pathetic.”
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Brad Jones

Brad Jones

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Brad Jones is an award-winning journalist based in Southern California.

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