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Illegal California Lab Received Tax Payer Funding

U.S. taxpayers are paying for a Chinese-backed bio lab in California that has garnered the attention of federal and state officials.

Public records reveal that the lab — which was raided earlier this year — was awarded nearly $150,000 from the federal government’s Covid-era loan program, receiving two separate loans of $74,912 in April 2020 and February 2021.

Furthermore, Universal Meditech (UMI) was awarded a $360,000 tax credit in 2018 through California Gov. Gavin Newsom’s CalCompetes program, although the company never received any of the promised funds.

The issues all began after UMI was taken over by a company with Chinese owners and moved to a warehouse in Reedley.

The black-market lab was brought to the authorities’ attention in early 2021 by a code enforcement officer who noticed a garden hose sticking out of a building where it shouldn’t have been.

After they obtained a warrant, Reedley officials found hundreds of vials containing biomaterials, including blood and tissue, as well as other unlabeled chemicals. Some of those vials contained chlamydia, E. coli, Streptococcus pneumonia, and other pathogens. There were also nearly 1,000 dead and dying mice that had been genetically modified to catch and spread Covid.

The previous year, UMI had received the tax credit in 2018 as part of the CalCompetes program, though the regulations state companies must honor a five-year agreement with the state showing job creation and financial progress in order to keep the credit. UMI failed to meet those conditions and did not receive the funds.

Records from the Paycheck Protection Program also show that UMI received two loans of $74,912 meant to help businesses keep their workers and cover necessary expenses. The loans were forgivable if the borrower used at least 60 percent for payroll costs and the rest for eligible expenses like rent, mortgage interest, or utilities.

Described in 2019 by the Fresno County Real Estate Forecast as “leveraging demand” for low-cost products, UMI was making pregnancy, ovulation, and Covid diagnostic tests.

The latter ended up being recalled by the Food and Drug Administration in late December 2022, as UMI had not received pre-market approval from the agency. An inability to recover from that recall, as well as a fire at the Fresno facility, led to UMI’s bankruptcy and it being taken over by Prestige Biotech, which is also owned by Chinese nationals.

Officials have spent months removing more than 5,000 gallons of biological waste from the Reedley site since its discovery. As of now, they have yet to learn the full extent of the activities taking place there.

When asked for a statement on it, Governor Newsom’s office referred inquiries regarding the case to the state’s public health authority, who declined to comment. The Food and Drug Administration also declined to comment on the ongoing investigation.

It’s unclear at this point if taxpayer funds allocated to UMI helped with the creation of the black market lab, and what more may come. As the story continues to unfold, it will become more apparent how this Chinese-backed bio lab came to be and to what extent U.S. taxpayers are responsible for its creation.

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