
Federal fraud indictment: KU professor secretly worked for Chinese university - mcenedella
https://www.kansas.com/news/state/article234237337.html
======
samirillian
> Last year, a Chinese national who was a research professor at Kansas State
> University was arrested and sentenced to 10 years in federal prison for
> stealing valuable American rice seeds — a trade secret — that can be used to
> treat gastrointestinal disease, antibiotic-associated diarrhea, hepatic
> disease, osteoporosis and inflammatory bowel disease.

Wait, who are the bad guys here?

~~~
shagie
That is a different individual... and the story described
[https://www.kansascity.com/news/state/kansas/article20800977...](https://www.kansascity.com/news/state/kansas/article208009774.html)

> Zhang, a lawful permanent resident in the U.S., was a rice researcher at
> Kansas State University and received a doctorate in rice genetics from
> Louisiana State University. He began working for Ventria in 2008 and was in
> charge of plant breeding and nursery operations.

> In 2012, Zhang and a co-defendant traveled to visit a crop research
> institute in China where Zhang once worked. The following year, the two made
> arrangements for a delegation from the Chinese institute to visit Kansas.

> ...

> Ventria invested about $75 million to develop this proprietary technology
> and is the only company in the U.S. that has it. The lab maintains seed
> banks in a climate-controlled environment. Only six employees had access to
> the storage area. Zhang was one of them.

\----

The story _here_ is:

> “Tao is alleged to have defrauded the US government by unlawfully receiving
> federal grant money at the same time that he was employed and paid by a
> Chinese research university — a fact that he hid from his university and
> federal agencies,” Assistant Attorney General John Demers said in a
> statement. “Any potential conflicts of commitment by a researcher must be
> disclosed as required by law and university policies.”

> The Kansas Board of Regents requires faculty and staff of its universities
> to file a conflict of interest report when they are hired and every year
> afterward for as long as they are employed.

> According to court documents, Tao “knowingly and intentionally submitted to
> the University false statements concerning his lack of a conflict of
> interest.”

> The indictment alleges that Tao “fraudulently received” more than $37,000 in
> salary paid for by the Department of Energy and the National Science
> Foundation.

~~~
close04
I imagine OPs point was that someone was arrested for stealing trade secrets
that could save/improve lives of (hundreds of) millions of people.

Just the other day in another part of HN there was a discussion about the
collecting and continued use the HeLa cell line for research and (a lot of)
profit. If you look this up the conclusion of every discussion tends to be
"end justify the means in this case", "the needs of the many outweigh the
needs of the few", etc. One has to wonder about the double standard here.

~~~
i_am_proteus
Ironically, if society adopts a viewpoint that blesses industrial espionage/IP
theft of any technology which "improves lives," companies lose motivation to
develop those same technologies.

The ability to profit off of innovation is necessary to pay for facilities,
equipment, and researchers.

~~~
mcny
> Ironically, if society adopts a viewpoint that blesses industrial
> espionage/IP theft of any technology which "improves lives," companies lose
> motivation to develop those same technologies.

> The ability to profit off of innovation is necessary to pay for facilities,
> equipment, and researchers.

I'm sorry but lets not talk about incentives until the CEO and the entire
board at Boeing, Equifax, and Wells Fargo are in prison. Our "justice" system
openly pursues "viable" cases which means we only send people to prison who we
think we can convict because we have "limited resources".

Lets not try to defend the prosecutors here by rationalizing what they do. I
won't vilify them either because they are just doing what WE incentivized them
to do but I won't throw any accolades their way either.

~~~
tracker1
I'd be satisfied if the CEO, senior management and board members had to turn
over all profits including stock options granted for the period of abuse. That
would be more impressive to me than jail time and seriously discourage similar
behavior.

------
addicted
So the accusation against Tao is:

> According to the federal indictment, in May 2018 Tao signed a five-year
> contract with Fuzhou University in China as a Changjiang Scholar
> Distinguished Professor and full-time employee.

and not disclosing this while seeking grants worth $37000?

Am I missing something or is this behind ridiculous? I’m pretty sure I had
professors who were similarly “employed” by a vast variety of universities and
didn’t always disclose that, not out of malice, but because they just didn’t
care. In fact, my college recently had a couple of high profile professors
fired for the same issue, without the Feds barging in.

I also find it interesting that this article references a completely different
case, where someone was actually accused of theft, but has absolutely no
connection to this individuals case at all.

------
lawguy
Online certifications are no joke.

[https://www.justice.gov/opa/press-
release/file/1197256/downl...](https://www.justice.gov/opa/press-
release/file/1197256/download)

> On or about September 25, 2018, in the District of Kansas, the defendant,
> for the purpose of executing the scheme described above, caused to be
> transmitted by means of wire communication in interstate commerce an online
> certification that he (1) read and understood the Kansas Board of Regents
> policy concerning conflicts of interest, (2) understood that any external
> personal professional activities in which he engaged that take time away
> from the University must not interfere with him meeting his faculty teaching
> and research responsibilities at the University, and (3) agreed to secure
> approval prior to engaging in any such external activities; all of which was
> in violation of Title 18, United States Code, Section 1343.

The indictment doesn't say whether the fraud was that (1) he didn't read or
understand the conflict of interest policy (presumably not, since that would
indicate this wasn't intentional); (2) he didn't understand that external
activities must not interfere with his University work (same); so it must be
(3) that he agreed to secure approval prior to engaging in any such
activities.

So the fraud is that he agreed to secure approval, but didn't follow through.

The indictment also claims:

> Tao certified to KU that he did not labor under any conflict of interest.

But the only certification mentioned in the indictment was that he agreed to
secure approval, not that he lacked any conflict of interest.

Regardless, the result of this failure to secure approval for a conflict of
interest was a four count indictment for wire fraud and theft by receiving
salary, plus a forfeiture request. He allegedly "embezzled, stole, and
obtained by fraud" grant money that funded his University salary, by virtue of
continuing to receive that salary.

~~~
closeparen
So every civil breach of contract is also criminal fraud? “You indicated to
your counterparty that you would obey the contract, but did not.”

~~~
khuey
Fraud requires intentional misrepresentation. "You indicated to your
counterparty that you would obey the contract, when you had no intention of
doing so" is what may be criminal fraud. Simply failing to perform is not
fraud.

------
crb002
I don't see the conflict as long as he did the work. Thinking he takes it to
trial and wins.

Now Iowa State University ECpE, they have full on corrupt faculty working full
time for their private company, showing just up for lectures to read out of
the book. Their TA's do all grading. Their RA's must sign NDAs and take
forever to graduate because he won't let them publish his "proprietary" stuff.
That is fraud.

~~~
Pinckney
90% of federal cases end in a guilty plea, and only 17% of federal cases that
do go to trial end in an acquittal.

[https://www.pewresearch.org/fact-
tank/2019/06/11/only-2-of-f...](https://www.pewresearch.org/fact-
tank/2019/06/11/only-2-of-federal-criminal-defendants-go-to-trial-and-most-
who-do-are-found-guilty/)

Most likely he looks at the 20 years he's facing if convicted of wire fraud
and decides to take a plea deal involving a couple years in prison.

------
rolltiide
Hm, the wire fraud count is always tacked on to everything.

Out of curiosity, can you be charged with wire fraud if you personally only
transact in cryptocurrencies completely on chain? value sent to you is in
crypto, value you pay out to others is in crypto?

(I've run several businesses for several years that do that and have never
needed to "cash out", even easier now with stablecoins which don't fluctuate
in value)

~~~
tlb
Yes. The statute:

"Whoever, having devised or intending to devise any scheme or artifice to
defraud, or for obtaining money or property by means of false or fraudulent
pretenses, representations, or promises, transmits or causes to be transmitted
by means of wire, radio, or television communication in interstate or foreign
commerce, any writings, signs, signals, pictures, or sounds for the purpose of
executing such scheme or artifice, shall be fined under this title or
imprisoned not more than 20 years, or both." [18 U.S.C. 1343]

"Money or property" includes cryptocurrencies, and "wire" has been repeatedly
interpreted to include the internet, email and text messages.

~~~
rolltiide
comprehensive one!

