Chinese Bio Lab in Reedley: COVID Fraud, Sentencing, Vegas Lab

The Chinese bio lab in Reedley, California, was an unlicensed laboratory discovered in a warehouse at 850 I Street in December 2022, operated by a Chinese national named Jia Bei Zhu through two shell companies. Inside, investigators found thousands of vials of biological material, nearly 1,000 genetically engineered mice, and the infrastructure for a scheme to sell fraudulent COVID-19 tests across the United States. Zhu was convicted on all 12 federal counts in May 2026 and faces sentencing in August.

What Was Inside the Warehouse

A city code enforcement officer, Jesalyn Harper, spotted a green garden hose running through the wall of a warehouse that was supposed to be vacant. What began as a building code call turned into one of the strangest biosecurity incidents in recent memory.¹

The Centers for Disease Control and Prevention identified at least 20 potentially infectious agents based on the vial labels, written in English, Mandarin, or an undeciphered code. The labeled agents included HIV, tuberculosis, malaria, hepatitis B and C, dengue virus, and SARS-CoV-2.² A freezer labeled “Ebola” held sealed silver bags consistent with how the lab stored high-risk materials.¹

Investigators also found nearly 1,000 transgenic mice genetically engineered to mimic the human immune system. Workers at the site told officials the mice were designed “to catch and carry the COVID-19 virus.” Containers were labeled with names of narcotics including MDMA, cocaine, methamphetamine, and THC, alongside flammable and corrosive industrial chemicals.³

Following a court order, 773 of the living transgenic mice were euthanized and incinerated in April 2023.³ The EPA finished its hazardous material removal in January 2024, hauling out over 800 containers of laboratory chemicals.⁴

Who Ran the Lab

The operator was Jia Bei Zhu, a 64-year-old Chinese national who used multiple aliases including Jesse Zhu, David He, and Qiang He.⁵ He ran the Reedley facility through two companies he controlled, Universal Meditech Incorporated and Prestige Biotech Incorporated. Neither was a licensed laboratory, and neither held the FDA authorizations required to manufacture or distribute medical tests.⁶ His first U.S. lab was in Fresno; he moved operations to the Reedley warehouse after a fire and the threat of eviction at the original site.⁷

Zhu arrived in the United States as a fugitive from Canada, where a judge described his intellectual property theft as fraud on an “epic scale” and imposed a CAD $330 million judgment against him. He had been found liable for deceit and civil conspiracy in a case that reached the Supreme Court of Canada.⁸⁹

The House Select Committee on the Chinese Communist Party later reported that Zhu had held positions at PRC government-controlled companies tied to China’s military-civil fusion ecosystem, and had received millions of dollars in unexplained wire transfers from Chinese banks while running the Reedley lab.¹

The Fraudulent COVID Test Scheme

The criminal case against Zhu centered on fake COVID-19 tests. Federal prosecutors alleged that from August 2020 to March 2023, Zhu and his partner, Zhaoyan Wang, imported hundreds of thousands of COVID-19 test kits from a Chinese company they controlled, Ai De Ltd., and falsely declared the shipments as pregnancy tests to slip past import regulations.¹⁰

They then sold the kits across the United States, claiming they were manufactured domestically, FDA-approved, and CDC-certified. None of that was true. The FDA had previously denied UMI’s application for Emergency Use Authorization because of major deficiencies in its test studies.⁵ Prosecutors said the pair made more than $1.7 million from the fraud and blocked buyers from inspecting their facilities with fabricated excuses about ongoing construction or proprietary technology.¹⁰ When FDA officials confronted Zhu directly, he assumed the identity of “David He” and lied about his role in both companies.¹¹

Wang, a 38-year-old Chinese citizen described as Zhu’s romantic and business partner, was named in a superseding indictment filed in August 2024. She faces conspiracy, wire fraud, and medical device distribution charges carrying up to 20 years. As of the latest available reporting, she is not in custody and has not entered a plea.¹²

Why Federal Agencies Were Slow to Act

Reedley City Manager Nicole Zieba and other local officials called the CDC and other federal agencies for help after the discovery. According to the congressional investigation, the CDC repeatedly refused to assist, and its staff hung up on local officials during phone calls. The agency declined to test any of the biological samples and relied solely on what the vial labels said.³

The CDC’s rationale was that the labeled pathogens were not “select agents” — the category of the most dangerous pathogens like anthrax — and so fell outside its regulatory authority. Local officials offered to pay the full cost of testing. The CDC still refused.³ The FBI opened an initial investigation but closed it after determining the site did not contain weapons of mass destruction. Federal help only arrived after U.S. Representative Jim Costa intervened on behalf of local officials.² The FDA’s Office of Criminal Investigations eventually led the enforcement action that produced Zhu’s arrest in October 2023.⁶

The “Ebola” freezer and its contents were destroyed without ever being tested, along with thousands of unlabeled or coded vials whose contents remain unknown. The Select Committee’s November 2023 report called the CDC’s response “unacceptable” and said the full scope of health risks to the surrounding community is “unknown and, at this point, unknowable.”³ One worker who tended the mice reported that he and his children became sick around the time he was handling them, though Fresno County officials said publicly that there was no evidence of a direct threat to the broader community.¹³

The congressional report ultimately concluded that the lab’s contents were “inconsistent with the operation of a CCP-linked bioweapons program,” but it still posed a “high risk” to individuals and could have been used for targeted attacks.⁷

The Verdict and Sentencing

Zhu went to trial in federal court in Fresno in April 2026. After a two-week trial, a jury found him guilty on all 12 counts on May 6, 2026: one count of conspiracy to commit wire fraud, eight counts of wire fraud, two counts of distributing adulterated and misbranded medical devices, and one count of making a false statement to the FDA.¹¹

He faces a maximum of 20 years for the conspiracy and wire fraud counts, three years for each distribution count, and five years for the false statement count.¹⁴ Sentencing before U.S. District Judge Dale A. Drozd is scheduled for August 24, 2026.¹¹

A Second Lab in Las Vegas

On January 31, 2026, the FBI and Las Vegas Metropolitan Police raided a home on Sugar Springs Drive in Las Vegas and uncovered a second unauthorized biological laboratory tied to Zhu. The property was owned by an LLC whose registered agent was David He, one of Zhu’s known aliases, meaning the lab had apparently kept storing materials while Zhu sat in federal custody awaiting trial.¹⁵⁷

Agents found residential refrigerators holding vials of unknown liquids, glass beakers of reddish liquid, a biological safety cabinet, hydrochloric acid on open shelves, and a centrifuge.¹⁶ FBI testing on more than 1,000 samples later showed the materials were mostly components for medical diagnostic test kits, along with influenza vaccine compounds and older, degraded flu samples. The FBI said there was “no indication of an ongoing threat to public health” but added that there were “no legitimate reasons for maintaining these types of biological materials within a private residence.”¹⁷ Several people who entered the garage reported falling ill, including a cleaning employee, a handyman, and a resident who was hospitalized with severe respiratory issues.

The Biosecurity Gap and What’s Being Done

Both cases exposed a basic weakness: the United States has no centralized federal system for identifying or tracking unauthorized labs. Existing biosafety regulations apply mostly to federally funded research or to the narrow “select agents” list. An estimated one-quarter of human pathogen research in the United States happens in the private sector, and roughly a quarter of those organizations operate with no federal oversight at all.⁷¹⁸ There are also no sufficient safeguards to monitor who is buying dangerous biological materials or specialized lab equipment from accredited suppliers, which is how unauthorized labs get their resources.

A bipartisan group of lawmakers responded with the Preventing Illegal Laboratories and Protecting Public Health Act of 2025 (H.R. 5747). Co-sponsored by Representatives David Valadao, Jim Costa, and Kevin Kiley of California along with Nevada Representatives Susie Lee and Dina Titus, the bill would require distributors of highly pathogenic agents to keep federally reviewable logbooks of all transfers, mandate periodic federal reviews of high-containment labs, create a dedicated federal biosafety response team, and commission a feasibility study on a centralized national database of such facilities.¹⁹ As of early 2026, it was awaiting a hearing before the House Committee on Energy and Commerce.²⁰

Separately, the FY 2026 National Defense Authorization Act included Section 6708, directing the Director of National Intelligence to produce a National Intelligence Estimate on China’s biotechnology advancements within one year.²¹ Biosecurity experts have also called for a standalone federal biosafety regulatory agency, modeled on the Nuclear Regulatory Commission, to consolidate oversight currently spread across the CDC, FDA, NIH, and other bodies.⁷

1
House Select Committee on the CCP. Investigation: Reedley Biolab Findings
2
KVPR. Congressional Committee Completes Report Into Illegal Reedley Medical Lab
3
House Select Committee on the CCP. Reedley Biolab Investigation Report
4
U.S. Environmental Protection Agency. EPA Completes Hazardous Material Removal at Illegal Lab in Reedley, California
5
U.S. Department of Justice. Arrest Made in Central California Bio Lab Investigation
6
U.S. Department of Justice. Operator of Central California Bio Lab Indicted
7
Lawfare. Two Illegal Biolabs Reveal Gaps in U.S. Biosecurity
8
The Bureau. New Details on Reedley Lab Operator
9
Supreme Court of Canada. Jesse Jia-Bei Zhu v. XY, LLC, Case No. 35555
10
U.S. Food and Drug Administration. Conspiracy and Fraud Charges Added Against Operator of Central California Bio Lab and His Partner
11
U.S. Department of Justice. Guilty Verdict for California Biolab Operator
12
Your Central Valley. Romantic and Business Partner Charged Alongside Reedley Lab Operator
13
ABC30. Reedley Illegal Lab New Details
14
Los Angeles Times. Reedley Biolab Operator Convicted in Scheme to Sell Millions of Faulty COVID Tests
15
8 News Now. Las Vegas Bio Lab Raid Possibly Tied to California Case
16
ABC News. Housecleaner Reports Multiple Illnesses Tied to Las Vegas House Bio Lab
17
Fox 5 Vegas. FBI: Materials Found in Las Vegas Home Bio Lab Consistent With Medical Test Kit Components
18
Time. Invisible Biolabs
19
Office of Rep. David Valadao. Preventing Illegal Laboratories and Protecting Public Health Act
20
Office of Rep. Kevin Kiley. Rep. Kiley Urges House Leadership to Advance Bipartisan Bill
21
Senate Biotechnology Caucus. Biotechnology Breaks Through in FY 2026 National Defense Authorization Act