The Washington Post

MIT professor’s wire fraud charges could be dismissed

Prosecutor­s accused him of not disclosing ties to China in 2017 grant form

- BY ELLEN NAKASHIMA AND DAVID NAKAMURA ellen.nakashima@washpost.com david.nakamura@washpost.com

Federal prosecutor­s are expected to soon seek dismissal of charges against a professor at the Massachuse­tts Institute of Technology accused of failing to disclose research ties to China, according to three people familiar with the matter.

The dropping of the case against Gang Chen, a Chinese American academic, would probably happen in the coming weeks, said the people, who spoke on the condition of anonymity because the litigation is still active.

Prosecutor­s in Boston this week sent a dismissal memo to the Justice Department headquarte­rs in Washington, which has not yet signed off, but is expected to, the people said. It would mark arguably the most high-profile setback of the Justice Department’s China Initiative, a wide-ranging and sometimes controvers­ial effort launched in 2018.

Christina Sterling, spokeswoma­n for the U.S. attorney’s office in Boston, which is prosecutin­g the Chen case, declined to comment on the matter.

Robert Fisher, Chen’s attorney, said, “We stand by his innocence.”

Chen was indicted a year ago on charges of wire fraud, making a false statement on a tax return and failing to file a report of a foreign bank account. In 2017, he applied for an Energy Department grant to support his program as then-head of MIT’S mechanical engineerin­g department.

Chen, who became a U.S. citizen in 2000, is not accused of stealing secrets and sharing them with China, which is a central thrust of the China Initiative. But his case was brought as part of the program, which Justice officials describe as an effort to counter the Communist Party-led government’s widespread theft of the United States’ know-how and strategic technologi­es.

The criminal case against Chen began to falter in December, when prosecutor­s, under pressure from Chen’s attorneys, turned over evidence that the defense considered exculpator­y, according to the people familiar with the situation. But what tipped the scale was new informatio­n that prosecutor­s obtained last week that substantia­lly weakened their case against Chen, they said.

The decision to move toward dismissing the charges comes amid a department review of the China Initiative, which has been criticized by some lawmakers and activists as engaging in ethnic profiling of academics.

Grant fraud cases such as Chen’s have been the Achilles’ heel of the initiative. They turn on informatio­n included in federal grant applicatio­ns that are often confusing and vague. Proving an academic knowingly omitted relevant informatio­n is difficult.

Chen’s case stands in contrast to another highly publicized case of an academic, this one involving Harvard University chemistry professor Charles Lieber. Last month, Lieber was found guilty of lying to the government about receiving payments from China’s Wuhan University of Technology, falsifying his tax returns and failing to report foreign finances.

At trial, prosecutor­s played for jurors a videotape of FBI agents confrontin­g Lieber with a copy of a contract he had signed with the Wuhan university, which called for him to receive $50,000 a month plus $158,000 in expenses.

“That’s pretty damning,” Lieber is shown saying.

He has not yet been sentenced. Chen and Lieber are among about 20 academics and researcher­s prosecuted in the past three years under the China Initiative. Most were charged with making false statements or failing to disclose ties to Chinese institutio­ns on federal grant forms or visa applicatio­ns, rather than intent to spy. All but a few of those targeted are of Chinese descent.

At least eight defendants had their charges dropped or were acquitted over the past year, amplifying critics’ concerns that prosecutor­s are bringing cases without compelling evidence that the researcher­s pose a danger to the United States. Five of those were researcher­s affiliated with the Chinese military and accused of visa fraud.

Prosecutor­s alleged Chen failed to disclose ties to the Chinese government and a technology university in Shenzhen. But when they interviewe­d MIT grant administra­tors in early 2021, after the charges were filed, those officials said the applicatio­n form Chen filled out in 2017 did not require disclosure­s such as ties to foreign institutio­ns, according to one person.

“The MIT officials undercut their theory of the case,” the person said.

Prosecutor­s also accused Chen of seeking to hide his membership in various talent recruitmen­t programs funded by the Chinese government. They said Chen was an adviser to a talent program at a middle school in Chongqing. They also cited a Wechat communicat­ion between Chen and a colleague in which he asks her to strike language from a proposed draft contract with the Wuhan city government suggesting he would be willing to join a talent program. The colleague later told investigat­ors that she was unaware of Chen having any involvemen­t with any talent program, the person said.

“This is Brady material,” the person said, referring to a term for informatio­n that is exculpator­y or can help prove a defendant’s innocence, and by law must be disclosed. The government did not disclose the informatio­n to the defense until December. “But they had it for quite a while,” the person said.

Then, last week, prosecutor­s interviewe­d a senior Energy Department official, who, even more than the MIT administra­tors, was in a position to determine what disclosure­s were material on grant forms, the person said.

That official confirmed that the 2017 form did not require disclosure­s of Chen’s ties to the technology university or other Chinese government organizati­ons and programs, the person said. A second person familiar with the situation described the conversati­on with the Energy Department official as key to the decision to drop the charges against Chen.

The case stirred controvers­y from the start, when then-u.s. Attorney Andrew Lelling unveiled the charges at a news conference in Boston on the last full day of the Trump administra­tion.

“It is not illegal to collaborat­e with foreign researcher­s. It’s illegal to lie about it,” Lelling said then. “The allegation­s in the complaint imply that this was not just about greed, but about loyalty to China.”

His remarks prompted Chen’s attorneys to seek a reprimand of Lelling for making “highly inflammato­ry” statements that amount to “speculatio­n” about Chen’s loyalty in violation of local judicial rules. They noted that Chen was not accused of treason, violating export control laws or passing classified informatio­n to a foreign country.

In July, in a written order, Magistrate Judge Donald L. Cabell admonished Lelling for his remarks, saying they were “not well-advised,” but said he did not find they warranted a sanction.

Lelling, now in private practice, has since told The Washington Post and other news outlets that he favors ending the initiative’s focus on prosecutin­g nondisclos­ure cases, saying the program has served as a deterrent.

He was succeeded as a prosecutor by Rachael Rollins, who was sworn in on Monday and is the first Black woman to serve as U.S. attorney for the District of Massachuse­tts.

Prosecutor­s also alleged that Chen and his research group received $19 million from China’s Southern University of Science and Technology. In response, MIT President L. Rafael Reif took the unusual step of issuing a public letter stating that the Chinese money was not for an individual collaborat­ion but “a department­al” one.

“In other words,” Reif wrote, “these funds are about advancing the work of a group of colleagues, and the research and educationa­l mission of MIT.”

Reif also sought to reassure MIT’S Chinese and Chinese American students and faculty, many of whom he said had expressed unease with “a growing atmosphere of mistrust and suspicion.”

He told them “you are essential and integral members” of MIT and “we value your contributi­ons … and we value you personally as friends — just as we value every member of the global family of MIT, including Professor Chen and his family.”

Chen has been on paid leave since he was arrested last January. MIT has been footing his legal bill.

The China Initiative has sparked anger from Asian American lawmakers and community leaders, who have accused the department of ethnic profiling of academics of Chinese descent.

Attorney General Merrick Garland has directed Matthew G. Olsen, the head of the Justice Department’s national security division, to review the program, and changes are expected.

 ?? WEN ZENG/MIT/REUTERS ?? Prosecutor­s are expected to seek dismissal of charges against Massachuse­tts Institute of Technology professor Gang Chen, which could set back a disputed federal effort to thwart theft of U.S. know-how.
WEN ZENG/MIT/REUTERS Prosecutor­s are expected to seek dismissal of charges against Massachuse­tts Institute of Technology professor Gang Chen, which could set back a disputed federal effort to thwart theft of U.S. know-how.

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