It was a crisp December day in 2022. Jesalyn Harper, the only full-time code enforcement officer in the small agricultural city of Reedley in California’s Central Valley— known locally as the “world’s fruit basket” because more fresh fruit is grown here than any other place on Earth—was responding to a complaint about vehicles parked in the loading dock of a cold-storage warehouse, when she noticed a foul smell and saw a green garden hose sticking out of a wall in the old run-down building. Little did she know this seemingly routine code violation would lead down a rabbit hole uncovering a house of horrors conducting mysterious experiments involving deadly pathogens and owned by an international fugitive selling fake medical tests with ties to the Chinese communist party.
What follows is one of the most bizarre and intrigue filled thriller true-crime stories in recent times. It’s like dropping acid and being seized upon by Kaleidoscopic visions of a Pandora’s box emanating a vortex of deadly biohazards, experimental rodents and shady transnational spies plotting nameless nefarious deeds. Except you’re not high, and this really happened. “It was literally shock after shock after shock,” Jesalyn Harper would later recall.
The House of Horrors Lab:
A woman in a lab coat answered Jesalyn Harper’s knock. Behind her were two others in plastic gloves and blue surgical masks, packing pregnancy tests for shipping. They told her in broken English that they were from China. As she walked through what turned out to be an underground biolab rather than a warehouse, she saw dozens of refrigerators and ultralow-temperature medical-grade freezers hooked to illegal wiring.
There were “Biohazard” signs plastered on the walls. She found vials of blood and jars of urine in shelves and plastic containers labelled in a mix of English, Mandarin and some kind of cipher.
The city also found approximately 1,000 transgenic mice kept in crowded, soiled containers. Mice used for research of human disease, which biolab workers told them were, “genetically engineered to catch and carry the COVID-19 virus.”
The women said the owner of this mysterious underground biolab lived in China, provided a phone number and email address and asked her to leave. Alarmed by what she saw, Harper contacted Fresno County health officials and then the FBI.
This launched investigations by federal, state and local authorities. During multiple inspections conducted over a span of several months, officials found infectious agents in the refrigerators including E. coli, coronavirus, malaria, hepatitis B and C, dengue, chlamydia, human herpes, rubella and HIV.
Prestige Biotech, the company that owned this super secret underground biolab appeared from nowhere last year with the Reedley lab and had purchased all of its assets from another company named Universal Meditech after the company went bankrupt. After Reedley code enforcement investigated the lab, they had great difficulty in validating that Prestige Biotech actually had the appropriate licenses to operate in California.
Prestige Biotech and Universal Meditech originally operated out of a building on East Tulare Avenue and South Mooney Boulevard in Tulare, California. By 2018, these two companies had moved to a warehouse in Southwest Fresno. In August 2020 their Southwest Fresno warehouse caught fire and officials discovered the company did not have a hazardous materials business plan for the ethanol it was using. Then, in October 2022, Fresno Public Health received a complaint about chemicals at the Southwest Fresno location, but they could not get access. This was the last record the Department of Public Health had of the company operating in the city of Fresno. How Prestige/Meditech resurfaced in the town of Reedley still remains a great mystery.
In fact officials were finally able to gain access to walk through the Reedley facility amid a nationwide recall of nearly 57,000 of Universal Meditech’s COVID tests. Universal Meditech was distributing these tests illegally and without FDA approval. (Remember, Prestige was also Universal Meditech)
On July 25, the Mid Valley Times, a local online news outlet, published an investigation that quoted court documents saying a representative of Prestige Biotech, Wang Zhaolin told officials during the March inspection that the mice had been genetically modified to catch and carry the virus that causes COVID-19. After the lab was shut down, Wang stopped cooperating with them.
Reedley officials conducted a follow-up investigation on April 12, and on the advice of a veterinarian who accompanied investigators, the decision was made to euthanize 773 mice. Investigators also discovered 178 dead mice on the property.
Court documents confirmed Prestige never contracted with a licensed medical waste hauler to dispose of medical wastes – including the mice – per state regulations; which means from October 2022 until the lab was shuttered, Prestige was illegally disposing of medical wastes generated by the lab. In fact, the entire Reedley operation was illegal. “It was pretty clear right off the bat that something was going on we didn’t have a business license for,” Reedley City Manager Nicole Zieba said. “They didn’t have any city approvals; that building was supposed to be vacant.” So bizarre was this whole situation that Fresno DPH Assistant Director Joe Prado exclaimed “Twenty-six years with the county of Fresno, and I have never come across this situation nor have I heard any of my counterparts deal with a situation like this” Since the lab did not use a licensed medical waste hauler, whatever medical wastes were onsite and which were disposed of were disposed of illegally.
“There were some statements by individuals who were going into the facility and dump it (waste) into their waste bin,” Prado said. “After that, it would go to the landfill.”
From May 2 through May 4, the CDC’s Division of Select Agents and Toxins inspected 850 I Street. Court documents confirm the CDC found potentially infectious agents at the location. These included both bacterial and viral agents, including: chlamydia, E. Coli, dengue fever, HIV, syphilis, streptococcus pneumonia, hepatitis B and C, herpes 1 and 5 and rubella. The CDC also found samples of malaria.
This crazy story got even crazier when the federal Centers for Disease Control and Prevention (CDC) said there was no sign the lab was illegally in possession of the materials or had select agents or toxins that could be used as bioweapons. “CDC has taken no further action in this matter,” the agency said in an email to The Associated Press, referring further questions to county and state officials. (Apparently the CDC deems it completely legal for illegal labs operating without building permits, licenses or laboratory certification to dump toxic biohazard waste into regular waste bins and to experiment on highly infectious bacteria and viruses that can be transformed bioweapons. Who knew?)
The Select Committee on Strategic Competition between the United States and the Chinese Communist Party published its investigative report on this most peculiar affair on Nov 15, 2023. According to this report, not only did the lab have specimens of infectious agents, but there were bags labeled “MDMA,” “cocaine,” “methamphetamine,” and “THC,” a finding conspicuously missing from mainstream news reporting.
This report claims local officials spent months repeatedly trying to obtain assistance from the CDC and on a number of occasions the CDC hung up on them mid-conversation. Ultimately, local officials contacted their local Member of Congress, Representative Jim Costa, who then got the CDC to inspect the Reedley biolab. Here is the complete pathogen list as enumerated by the CDC’s own report. (CDC made this list of based solely on the labels. The CDC did not test these samples to assess whether the listed labels were correct).
The CDC counted 20 different infectious pathogens by their own report (below)
The CDC did not even test the wholly unlabeled samples. It did not test the samples labeled “COVID,” even though both SARS-CoV and a chimeric version of the currently endemic COVID-19 are both Select Agents—biological agents that the U.S. government has determined “have the potential to pose a severe threat to public health and safety. Despite their limited local budget, local officials then offered to pay the CDC for the entirety of the cost of testing these samples. The CDC still did no testing. The CDC finally concluded “However, there is insufficient evidence at this time to conclude that there has been a violation of 42 CFR 71.54 or 42 CFR part 73.”
When it came time for local officials to start dismantling the Reedley lab, they set about to review every freezer for evidence of potential pathogens that they needed to destroy. While doing so, local officials and contractors reported that they found a freezer labeled “Ebola” with silver sealed bags inside. They wrote to the CDC “when you are going through and looking for select agents, do the containers need to be labeled individually with what is in it to count as one? We are doing the abatement here in Reedley and a fridge [freezer] had a label on it and one of the words in English was Ebola,” while noting that the containers within were not expressly labeled “Ebola.” The CDC official responded by stating, “Yes, we would typically look for the vial to be labeled as Ebola” and noted that they did not recall seeing the Ebola label. He did not cite any CDC policy when making this pronouncement. You’d think the country’s foremost public health agency would’ve leapt to action at the mere possibility of Ebola virus being handled at an illegal unlicensed lab instead of coming up with the harebrained notion that unlabeled bags were unworthy of their consideration.
To add to the depravity of it all, this lab was being massively subsidized, and in effect funded, using California tax credits under the “Go-Biz” program (more on this later)
The International Man of Mystery Behind the Operation:
As insane as this story already is, we’re going to be turning the dials on bizarro meter way past 11 now. So hang onto your knickers, because the ride gets wilder.
The Reedley house of horrors was owned by Jia Bei Zhu, aka Jesse Zhu, Qiang He, aka David He, a 62-year-old Chinese national with multiple aliases and a Canadian driver’s license. Zhu was a fugitive from Canadian law enforcement after he defrauded and stole a U.S company’s closely guarded, highly lucrative sex-sorting technology on cattle, horses and pigs. Canadian Courts had ordered Zhu to pay $330 million in damages to this US company named XY LLC in 2016. The American company controls more than 90 per cent of the sexed-semen market, which has annual sales of nearly $300 million. In order to circumvent Canadian patent law and continue using the confidential technology, Zhu’s company declared bankruptcy and set up a series of shell companies, a move Zhu described as part of his plan “to defeat the American aggressor and wild ambitious wolf!”
Zhu fled Canada and entered the United States unlawfully, assumed the false identity of “David He”and then set up a whole new network of companies.
According to the Select Committee report, while living in China in the 2000s, Zhu served as the Vice Chairman of a PRC state-controlled enterprise, Henan Pioneer Aide Biological Engineering Company Limited (“Pioneer Aide China”). PRC government entities exercised a controlling interest in Pioneer Aide China as beneficial owners and shareholders through a series of passthrough joint venture companies, including a company involved in military-civil fusion for the PRC. Zhu also served as Chairman of the Board and General Manager of Aide Modern Cattle Industry (China) Company Limited (“Aide Cattle China”), a company whose directors included an executive for a PRC defense firm and a company on the U.S. Entity List. Shareholders in Aide Cattle China include PRC state-controlled entities and individuals who have invested in other PRC state controlled entities. Through Aide Cattle China, Zhu was the primary shareholder of 11 PRC cattle companies. After Zhu moved to Canada, he created additional corporations there and his Canadian company, IND Modern Cattle Development Group Corporation (IND Group), became a minority shareholder in Pioneer Aide China.
I won’t go into depths of the dizzying complexity of connections between Zhu and the Chinese military industrial complex. You’re welcome to peruse the Select Committee report that details it here. What remains irrefutable is that Zhu wasn’t some run-of-the-mill businessman turned criminal as the media wanted you to believe, but a man with prominent connections to the ruling elite in his birth country including those at the very upper echelons of the defense sector.
Furthermore, the connection to cattle was important because, while Zhu managed these cattle -related businesses in China, he traveled overseas and created dozens of companies in Canada. These companies engaged in massive theft of American cattle-related intellectual property, resulting in the $330 million judgment against Zhu and his coconspirators. As Zhu stated in documents that the Select Committee obtained from the Reedley Biolab, “the Company is looking to seize the opportunity to develop the operational platform for the rapid growth in the Chinese dairy industry, fulfilling [PRC] Premier [and CCP Politburo Member] Wen Jiabao’s wish to ‘provide every Chinese, especially children, sufficient milk every day.’” At that time, China faced a pressing milk crisis and the PRC’s government was pursuing “policies to develop the high yielding dairy cattle market.”
Following his arrival in Canada, Zhu created dozens of corporations in China, Canada, the United States, the British Virgin Islands, the Cayman Islands, and Uruguay. While Zhu employed many PRC nationals and even named them shareholders, they were only shareholders on paper and in reality Zhu owned these companies. Zhu used these corporations to steal valuable American intellectual property and unlawfully transfer it to the PRC. This is how he transferred confidential information and technology obtained from XY in Canada to IND Modern Cattle Development Group Corporation in China.
The Supreme Court of British Columbia found Zhu guilty of “fraud on an ‘epic scale’ that ‘resulted in one of the largest awards in a Canadian court’” during XY LLC’s litigation process with Zhu. The court found Zhu and his PRC co-conspirators made many disturbing statements including instances where Zhu, in response to a co-conspirator’s reference to “American imperialism,” replied that “the law is strong, but the outlaws are ten times stronger.” Canadian courts found Zhu guilty of IP theft, conspiracy, and other claims and issued a $330 million judgment in June 2016.. Zhu fled Canada after an arrest warrant was issued for failing to appear in court.
After arriving in the US, Zhu replicated his tried and tested modus operandi of using a network of interconnected companies in the PRC, Canada, US and elsewhere that were notionally distinct but, in practice, all subject to Zhu’s direction and control. Which is how Prestige Biotech and Universal Meditech came into being. For example, UMI borrowed $240,000 from two of Zhu’s previously established companies—IND Dairytech USA Inc. and International Newtech Development between January 3, 2021 and September 24, 2022. However IND and its various holdings, implicated in the Canadian court ruling, were supposed to be defunct in 2021 after he declared bankruptcy in Canada.
According to the Select Committee report, Zhu wasn’t only setting up a vast and complex network of shell companies to defraud and steal North American intellectual property, he was funding and incorporating —through an “accountant”—organizations whose leadership was linked to CCP. These include organizations that advocate for CCP control over Taiwan and the setting up of “little red classrooms” in Nevada’s public schools to promote CCP ideology and promote the CCP’s narrative about the COVID pandemic.
The Arrest, the fake tests and weird payments:
Zhu was finally arrested on October 19, 2023. Not for stealing IP, not for creating shell companies and defrauding, not for evading arrest in one country and being illegally present in another, not even for running an illegal lab with 1000 mice and deadly pathogens, but for selling fake COVID and pregnancy tests and lying to the FDA. Apparently the FDA is the highest law enforcement agency in the US now. (Note to self: don’t run afoul of the FDA, have fun doing everything else)
The Reedley Biolab contained dozens of large boxes full of Chinese-made medical device test kits, shipping manifests for these items from the PRC, and bills indicating the acquisition of these test kits from PRC companies (in some cases, companies affiliated with Zhu). These kits were used to test for COVID-19, pregnancy, ovulation, and certain narcotics. The FDA recall list is mind-boggling in that Zhu and his co-conspirators had flooded the US market with 25 different fake tests using at least 11 different distributors in a remarkably short span of time. In fact the FDA went so far as to label them “not be safe and effective,” which is a black swan event in our current times.
It appears that Zhu’s companies were simply putting PRC made test cassettes and rebranding them in boxes stamped “Made in the USA.”
In fact, contrary to media reports that the lab was manufacturing and using the pathogens to run validation and QC checks on these tests, most of the equipment recovered from the Reedley lab was machines for folding and packaging products. (See picture below)
The Select Committee investigation uncovered documents showing Zhu received unexplained payments via wire transfer from Chinese banks totaling over $1.3 million. This makes no sense since he should have been paying money to Chinese companies for supplies and test kits and receiving payments from North American individuals or companies who purchased these counterfeit test kits. Was the whole thing a money laundering-IP theft operation while weakening America by creating chaos and flooding the country with fake COVID and pregnancy tests in the middle of a pandemic?
Systemic failures too many to count:
The system failed at every step at a time when the COVID pandemic should’ve rendered it hypervigilant to exactly this sort of thing.
- How was Zhu able to enter the US illegally, get a California driver’s license using an alias and set up a network of shell companies remarkably similar to those in Canada while previously defrauding an American company (XY LLC) and having an outstanding arrest warrant in Canada?
- How can someone sell not one, not two, but twenty five different fake tests using 11 different distributors in the American market and evade detection by regulatory agencies?
- What were the public health consequences of these fake tests? Is this the only instance, or are there many more overseas manufactured fake tests still being sold on the market that haven’t come to light because there’s no Reedley underground lab attached to them?
- Did the FDA conduct a thorough surveillance of the home test kit market to ascertain there were no other bad actors out there?
- Were these tests reading only false negatives (person has COVID or is pregnant and the test reads negative) or were these tests giving false positives (No COVID or pregnancy but tests reads positive) and why doesn’t the FDA describe the exact nature of the defect? Worse still, did they actually test them to find out?
- The CDC response to the biolab defies explanation. Especially in the wake of a pandemic when the heightened awareness of the kind of public health catastrophe a lab escape could unleash on a nation should have terrified and galvanized them into action. Why would they not even to bother to test the specimens? Vital evidence which could have been used to implicate Zhu in far serious crimes was permanently destroyed because of their refusal to investigate further.
- The official explanation for the infectious pathogens at the Reedley lab—accepted without question by the media—was that they were used in the manufacture and QC of the tests. You don’t have to be a virologist to know that home COVID tests don’t contain virus particles. Universal Meditech (Zhu’s company) sold pregnancy, COVID and urine tests, none of which require experimenting on pathogens. What then was the purpose of E. coli, coronavirus, malaria, hepatitis B and C, dengue, chlamydia, human herpes, rubella, HIV and other microbes found at the lab?
- And here’s the pièce de résistance: Zhu’s lab received a $360,000 tax credit from Governor Gavin Newsom’s ‘GO-Biz’ program. How in holy hell does a complex network of shell corporations run by an international fugitive running a packaging facility front for overseas manufactured tests qualify for tax credits get zero scrutiny from a gigantic state machinery of checks and balances? Was no due diligence done? Are there more of these kinds of operations hiding in plain sight and suckling at taxpayer teat?
Who is Zhu’s wife and the deceased “FBI” brother-in law?
The Supreme Court of British Columbia ruling in XY LLC vs Zhu in 2016 mentions a defendant, Shuli Wang (“Ms. Wang”), supposedly Zhu’s wife, and a defendant brother-in-law, Shu Xi Wang (aka Peter Wang), a “former director of FBI and is now deceased.”
Neither the Select Committee report nor any news media coverage of this affair make any mention of this most peculiar and possibly important connection.
Has anyone bothered to find out where the wife is and investigate her ties to the Reedley lab? What FBI did the brother-in-law work for? (Canadian equivalent of the FBI is called CSIS, unlikely they were referring to someone working in Canada)
While American citizens faced censorship for the mere act of asking questions and were branded agents of misinformation and disinformation, Zhu and his co-conspirators apparently circumvented every law on the book with facile impunity. This sordid saga has unroofed gaping holes in our nation’s bio-defense apparatus, regulatory framework and its ability to coherently assess grave national security risks leaving us vulnerable for future exploitation on a much grander and more heinous scale.
Remember that this story came to light due to pure happenstance and the dogged assiduousness of one lone code enforcement officer doing her job while an entire national apparatus was asleep at the wheel. Are there other Houses of Horrors? Your guess is as good as mine.
Thank you for reading. This investigation was made possible with your patronage readership and encouragement. I hope to bring you even more compelling content in the future. Here’s wishing you and your loved ones a very happy and prosperous New Year.