Deadlocked Jury Zeroes In on Alleged US$40 Million PPE Fraud in Linda Sun PRC Influence Case

BROOKLYN — A jury of New Yorkers will return to court Monday, heading into their second week of deliberations in a landmark foreign-agent and corruption trial that reaches into two governors’ offices, struggling to decide whether former state official Linda Sun secretly served Beijing’s interests while she and her husband built a small business and luxury-property empire cashing in on pandemic-era contracts as other Americans were locked down.

On Thursday — the fourth day of deliberations — the jury sent federal Judge Brian Cogan a blunt note saying they were deadlocked on the sprawling case, in which the federal government has asked jurors to accept its account of a complex web of family and Chinese-community financial transactions through which Sun and her husband allegedly secured many millions of dollars in Chinese business deals channeled through “United Front” proxies aligned with Beijing.

The defense, by contrast, argues that Sun and her husband were simply successful through legitimate, culturally familiar transactions, not any covert scheme directed by a foreign state.

“We deeply feel that no progress can be made to change any jurors’ judgment on all counts,” the panel wrote Thursday. “There are fundamental differences on the evidence and the interpretation of the law. We cannot come to a unanimous decision.”

Cogan reportedly responded with a standard “Allen charge” — an instruction often used in deadlock situations, urging jurors to keep an open mind and continue deliberating. Because a juror had to be replaced due to travel commitments, the reconstituted panel will need to restart deliberations from square one on Monday.

According to a message the U.S. Justice Department sent to The Bureau on Wednesday, the panel had already asked for transcripts from four witnesses — Sean Carroll, Mary Beth Hefner, Karen Gallacchi and Jenny Low.

Those requests underline just how dense the case is — and how much money was at stake in the pandemic-era PPE deals at the heart of several key counts. Sun and her husband, businessman Chris Hu, face 19 counts in total, including Sun acting as an unregistered foreign agent for the People’s Republic of China; visa-fraud and alien-smuggling charges tied to a 2019 Henan provincial delegation; a multimillion-dollar pandemic PPE kickback scheme; bank-fraud and identity-misuse allegations; and multiple money-laundering and tax-evasion counts.

Carroll and Hefner’s testimony is central to the government’s key procurement-corruption allegation. Prosecutors say Sun used her influence to help steer more than US$40 million in PPE contracts to companies tied to her husband in China, with an expected profit of roughly US$8 million — money they allege was partly kicked back to Sun and Hu and funneled through accounts opened in Sun’s mother’s name and via friends and relatives.

Prosecutors say the clearest money trail in the Sun case runs through New York’s COVID PPE scramble and a pair of Jiangsu-linked emails.

“What was Linda Sun’s reward for taking official action to steer these contracts through the procurement process? Millions of dollars in kickbacks or bribes. It was money that she knew would be coming her way if she pushed these contracts through,” prosecutor Alexander Solomon told jurors in closing.

He argued that in March 2020, as the pandemic hit, a Jiangsu provincial official in Albany emailed state staff, including Sun, with information on four Chinese PPE and medical suppliers — and that the next day Sun forwarded herself a second email that copied the language about two of those vendors but added a new line claiming that “High Hope comes highly recommended by the Jiangsu Department of Commerce.”

A New York State IT specialist testified that this exact phrase appears only once in the state’s entire email system, in Sun’s self-forwarded message. Prosecutors urged jurors to see it as a fabricated email.

They suggest it is one of a number of frauds and forgeries, including claims that Sun repeatedly faked Governor Kathy Hochul’s signature on invitation letters used to bring Chinese provincial officials into the United States as part of plans to build a large education complex in New York.

On the PPE dealings, prosecutors say that during a period when Sun still had broad latitude to vet vendors, she sent procurement official Sean Carroll a proposal for High Hope to supply five million masks.

Prosecutors say she did not disclose that High Hope was tied to family associate Henry Hua or that she had a financial interest in the deal, but did repeat language that the company “came recommended” by Jiangsu authorities — phrasing Carroll testified he understood as an official validation from the Chinese side.

Prosecutors then linked the High Hope contracts that moved through Carroll’s office to alleged downstream cash flows laid out in a Chris Hu spreadsheet: PPE contract money Hu recorded as owed by Jay Chen, marked as wired into an account called “Golden” and then on to “HC Paradise,” the vehicle Hu allegedly used to pay for a Hawaii property.

In the government’s telling, that is how a doctored Jiangsu government “recommendation” for High Hope ultimately turned into New York taxpayer funds helping to buy a Hawaiian condo.

As The Bureau has reported in detail, prosecutor Alexander Solomon used his closing argument to give jurors one of the clearest open-court narratives yet of how the Chinese Communist Party’s United Front allegedly seeks to shape Western politics through diaspora networks — and to argue that Sun sat at the center of such a network in Albany.

Solomon walked the panel through a cast that ran from Sun’s family and business partners in Queens to United Front–linked association bosses in New York, provincial officials in Henan and Guangdong, and senior staff at China’s New York consulate. In his account, Sun — officially feted in Beijing as an “eminent young overseas Chinese” after a 2017 political tour — became a “trusted insider” who quietly repurposed New York State letterhead, access and messaging to serve Beijing’s priorities on Taiwan, Uyghurs and trade, while keeping that relationship hidden from her own colleagues.

Among the most striking elements of the government’s case, as The Bureau reported from Solomon’s summation, were that Sun allegedly forged Hochul’s signature on multiple invitation letters that Chinese officials then used to secure U.S. visas for provincial delegations — promising meetings in Albany that, Solomon said, no one in state government had actually approved — as part of a broader push by Henan Province to anchor a major education complex in the United States.

He then tied that influence narrative to money: millions in lobster-export deals for Chris Hu, allegedly greased by Chinese officials and New York-based United Front intermediaries; coded “apple” cash drop-offs funneled through third-party accounts; and the pandemic PPE contracts.

In Solomon’s formulation, all of that adds up to clandestine agency for Beijing.

He told jurors that while Sun was boasting to Chinese consulate officials that she could treat Hochul “like her puppet,” she was acting “like an agent,” treating PRC officials as her “real bosses,” and seeking and receiving benefits. Sun kept doing so, Solomon said, even after an FBI agent warned her about the Foreign Agents Registration Act and the risks of working too closely with the consulate.

Defense lawyers for Sun and Hu, in their own summations, urged the jury to reject that picture of a couple monetizing their access to senior American politicians in order to enrich themselves through clandestine business dealings facilitated by community leaders secretly working for Beijing’s United Front units. According to the Global Investigations Review summary and other accounts, they argued that prosecutors have overreached by criminalizing ordinary diaspora politics, networking and pandemic procurement.

On the defense view, much of what the government calls “direction and control” is better understood as routine back-and-forth involving a diaspora liaison in the governor’s office and community or trade groups with ties to China. None of the government’s evidence, they argue, amounts to an agreement to operate under the “direction or control” of a foreign principal — the core FARA requirement.