Illegal Biolabs in Vegas and California Linked to Chinese National With Alleged Military-Civil Fusion Ties, $330M Canadian Fraud Judgment

FBI and Las Vegas police execute search warrants at properties linked to Jiabei "Jesse" Zhu, already facing federal charges over a Reedley biolab containing samples of HIV, tuberculosis, and malaria.

LAS VEGAS/VANCOUVER — Federal and local authorities are investigating suspected illegal biological laboratories in Las Vegas and California’s Central Valley linked to a Chinese national accused by Congressional investigators of ties to a PRC military-civil fusion enterprise, who spent a decade operating what Canadian courts found was a systematic technology-theft operation from British Columbia before fleeing south with a $330 million fraud judgment against him.

The FBI and Las Vegas Metropolitan Police Department executed search warrants over the weekend at two residences connected to Jiabei “Jesse” Zhu, a 62-year-old Chinese citizen already under federal indictment for operating an illegal biolab in Reedley, California that contained labeled samples of at least 20 infectious agents including HIV, tuberculosis, and what the House Select Committee on the Chinese Communist Party described as “the deadliest known form of malaria.”

Las Vegas Metro Sheriff Kevin McMahill confirmed Monday that investigators recovered over 1,000 samples of biological material “consistent in appearance” with items found in the California facility.

“This can’t keep happening,” Congressman Kevin Kiley said after the Las Vegas raid, calling for immediate hearings on bipartisan legislation he introduced with Representatives Jim Costa and David Valadao. “The illegal bio lab just raided in Las Vegas was operated by the same LLC and Chinese nationals as the one discovered in Reedley.”

In the Reedley case, investigators discovered nearly 1,000 bioengineered laboratory mice, infectious agents including E. Coli, malaria, various chemicals, medical waste, blood, tissue, serum, body fluid samples, and illegal pregnancy tests, Congressman Costa noted, citing the Select Committee’s review.

Property records show both the Reedley warehouse and the Las Vegas homes are owned by the same limited-liability company whose officers include Zhu and his business partner Zhaoyan Wang, both Chinese citizens facing federal trial in April 2026 on charges of distributing hundreds of thousands of misbranded COVID-19 and other testing kits.

The House Select Committee on the Chinese Communist Party’s investigation frames Zhu as a Chinese citizen from Canada “associated with PRC-government linked companies” and with direct ties to state enterprises and military-civil fusion networks.

Photos from their review show freezers packed with numerous small bottles and sample containers holding what the caption identifies as blood and other fluids, plus sealed bags labeled with apparent drug shorthand (for example “MDMA,” “Coca,” and “Met”), suggesting the freezers were being used to store both biological materials and suspected narcotics-related items.

The report states that in the early 2000s, Zhu served as vice chairman of Henan Pioneer Aide Biological Engineering Company Limited, a PRC state-controlled enterprise whose corporate ownership structure the Committee mapped to show interlacing with state-linked financing channels running through China Development Bank and its affiliated funds, the National Council for Social Security Fund, and the State-owned Assets Supervision and Administration Commission.

The report explicitly flags Chinese military exposure, noting that beneficial owners operated through passthrough joint-venture companies including Henan Investment Group Company Limited, which the Committee describes as “involved in military-civil fusion.”

The Select Committee documented that Zhu’s work in cattle genetics connected to strategic PRC priorities.

As Zhu stated in documents 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.

Long before federal agents discovered thousands of vials in Reedley in December 2022, Zhu had established himself in British Columbia as the architect of a sprawling transnational operation touching everything from cattle sex-sorting technology to the genetic production—or fraudulent representation of such—of prized Wagyu cattle famous for producing Kobe beef, leaving Canadian courts documenting systematic fraud spanning from Beijing to Quebec.

Court testimony established that Zhu, operating from Vancouver while maintaining direct control of a Beijing-based biotech entity, built a network across four countries involving genetic manipulation of cattle embryos, reverse-engineering of American proprietary technology, falsification of production records, and maintenance of what one witness described as “two sets of books”—one to report to the American licensor, another reflecting actual operations.

As sole shareholder and director of Vancouver-based International Newtech Development Incorporated since 1994, court testimony established Zhu operated through at least nine entities: four Canadian companies, five Chinese entities, Cayman Islands holding companies, and U.S. subsidiaries. Those U.S. subsidiaries included IND Lifetech (California) Inc., incorporated in 2007 and operated from Fresno—the same California city where federal authorities would discover his illegal biolab fifteen years later.

At the operational center sat Beijing IND Embryontech Co. Ltd., a company Zhu identified himself as directing in a March 2008 sworn affidavit, confirming he was “the boss” of the Beijing entity. The court record establishes Zhu maintained direct corporate presence and control in the capital of the People’s Republic of China while simultaneously holding Canadian citizenship and residing in British Columbia.

The 2012 British Columbia trial judgment upheld claims by XY LLC, a Colorado-based biotechnology firm, that JingJing Genetics and associated Zhu-controlled entities systematically deceived the company and vastly under-reported production to deprive XY of substantial royalties owed under licensing agreements for proprietary cattle sex-sorting technology. Senior engineer Kevin Xu, who worked for the IND group in both Canada and China from 2006 to 2014, testified that Zhu directly instructed him to copy specific XY proprietary components and send damaged nozzle tips to Chinese manufacturers as early as 2008 with instructions to reverse-engineer and replicate them.

On January 1, 2008—as litigation intensified—all JingJing shares were sold to Zhu’s brother-in-law and a friend, both China residents, in a transaction the court found was designed to evade liability. In Quebec, financial manager Selen Zhou testified their embryo production lab began producing Wagyu cattle embryos, but a lab doctor testified he was never told about this switch and continued signing export certificates for Holstein embryos. The court found the lab was actually continuing to produce Holstein IVF embryos using XY’s licensed technology, not Wagyu as falsified production records indicated.

The court found this pattern of coordinated deception, reverse-engineering of proprietary technology, falsification of production records, concealment of assets through sham transactions, and corporate maneuvering across multiple jurisdictions constituted what the judge characterized as “fraud on an epic scale.” The resulting $330 million Canadian dollar judgment reflected systematic technology diversion from North America to Chinese manufacturing partners under Zhu’s centralized direction. Then Zhu fled to the United States.

The Reedley facility received millions in unexplained wire transfers from Chinese banks while the supposed business—selling medical test kits—consisted entirely of importing counterfeit kits from China for resale, according to American lawmakers.

“While the supposed purpose of the lab was to sell test kits, in fact all the company did was buy counterfeit kits from China and re-sell them in the United States,” Kiley stated.

The CDC’s response triggered sharp Congressional criticism. The agency initially refused to take phone calls from local officials and declined to test samples with unknown contents. “At first, the CDC refused to investigate, and even hung-up on local officials who asked for help,” Kiley recounted. “After Rep. Costa got involved, the CDC did an inspection and found ‘at least 20 potentially infectious agents, including HIV, Tuberculosis, and the deadliest known form of Malaria.’ Yet the CDC did not bother to test any samples, even those with unknown contents.”