At the epicenter of current controversy, an illegal California lab run by a Chinese biotech firm, Prestige Biotech, was recently discovered in a warehouse in Reedley, California. The lab contained mice which were genetically engineered to spread COVID-19.
According to National Review, “court documents further showed that the Centers for Disease Control (CDC) conducted tests on the more than 800 chemicals found at the site and that over 20 infectious agents were found present, including Hepatitis B and C, streptococcus pneumonia, chlamydia, rubella, and Herpes 1 and 5.” As a federal investigation is underway, where will the money trail lead us?
As recently discovered, Prestige Biotech is registered in the State of Nevada, but unlicensed to conduct business within the State of California. Code enforcement officials from the City of Reedley spoke to Xiuqin Yao, President of Prestige Biotech, as identified via emails and court documents. Ms. Yao informed authorities that the company was the largest creditor of Universal Meditech (UMI), Inc. which filed for bankruptcy. UMI had been relocated from the City of Fresno to the Reedley warehouse following an electrical fire, and when UMI ceased operations. According to NBC News, “Prestige Biotech was a creditor to UMI and identified as its successor, according to court documents.”
A document released on March 24, 2019 by Governor Newsom’s Office of Business and Economic Development, a California Competes tax credit allocation agreement of $360,000 was cemented with UMI.*
In 2019, Mr. Zhaoyan Wang, CEO of UMI, praised the Fresno County Economic Development Corporation’s guidance regarding tax credit opportunities and HR resources.
“The EDC has provided us with guidance and HR resources as well as worked with us in terms of the NEO program, which has helped us save a lot of time and working capital on employee hiring. The EDC has also informed us about other incentives available for business, such as California Compete Tax Credit and referred us to proper departments and personnel for further assistance.” – Zhaoyan Wang
A February 2019 article from The Business Journal, reported:
“A Tulare manufacturer of medical devices has made the move to Fresno, and has created 10 new jobs in the process.
Universal Meditech’s new home is located in the North Pointe Industrial Business Park near North and Orange avenues. The 3-year-old company develops, makes and sells in vitro diagnostic devices including pregnancy, ovulation and menopause tests.
Zhaoyan Wang, Universal Meditech CEO, attributed lower costs, location and access to a diverse pool of capable employees in making the decision to move to Fresno.
“Everyone in Fresno, from the Economic Development Staff and City Planners to the property owner that offered us beautiful space to lease at an affordable price were wonderful,” Wang said in a statement. “The entire process was smooth and we are extremely happy with our decision to move our headquarters to the City of Fresno.”
The company had determined its previous space was too expensive and didn’t suit their growing needs. Candace Liu, Universal Meditech’s chief operating officer, said the company explored other options in California and even out of state. A tag team effort from the City of Fresno Economic Development Department and the Fresno County Economic Development Corp. played a key role in relocating their manufacturing and research and development operations to the company’s 20,000 square-foot Fresno space.
“We are extremely grateful for their commitment to keep growing companies like us in California,” Liu said.
To date Universal Meditech has hired about 10 new employees in Fresno, and have retained a number of their South Valley employees who decided to remain and make the commute north.
Fresno Mayor Lee Brand attributes the successful move of Universal Meditech, among others, to the availability of a well-trained Fresno workforce combined with an influx of available industrial space offered at affordable prices.
“We have everything that businesses need to ensure ongoing success,” Brand said. “If you are looking for the perfect environment to allow your business to grow, Fresno should be at the top of your list.”
*UPDATE/Correction request: The Globe received a request for a correction from Deputy Director of Communications Heather Purcell and Assistant Deputy Director of Communications (Governor’s Appointee) William Rudman, California Governor’s Office of Business and Economic Development (GO-Biz). I spoke with Mr. Rudman by phone, and further communicated by email.
Ms. Purcell said “Prestige Biotech did not receive any funding through CalCompetes. According to your article, Prestige Biotech was a creditor for Universal Meditech, Inc (UMI), but was never a party to the CalCompetes agreement. Also, UniversalMeditech did not end up receiving any funding through CalCompetes tax credits.
Universal Meditech, Inc. (UMI) was awarded a $360,000 California Competes tax Credit on 4/11/2019. UMI did not achieve any of its milestones and was not approved to claim any of the tax credits. GO-Biz recaptured the entire credit and voided the Agreement with UMI.”
However, the tax credit was not rescinded until June 2023, despite being awarded/allocated in 2019. Per a July 2023 article from NBC News, the Reedley warehouse investigation has been ongoing for the past several months. Are you confirming that this investigation and the withdrawal of the tax credit for UMI were in no way, shape or form related?
The Sacramento Bee reported: “House Speaker Kevin McCarthy joined other local politicians in sounding alarms about the ties between China and a secret lab that was shut down earlier this year in Reedley, talking with reporters Thursday in Clovis.”
“The Bakersfield Republican, who met with the media at his newly opened office in Clovis, said he’d spoken to local officials earlier that day about the “disturbing” discoveries out of Reedley. He pledged to take these concerns back to the select committee on China he convened shortly after becoming Speaker of the House this January.
“My concern is to get to the bottom of what happened here,” he said, “but also … where’s this happening in other parts of this country?”
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