MIT Professor Charge for Illegal Ties With Communist Government of China

CAMBRIDGE, MA –  An MIT university professor has been charged by the federal government for accepting funding from the Communist Chinesse government to conduct research against the law in the United States.

A professor and researcher at Massachusetts Institute of Technology (MIT) was charged and arrested today in connection with failing to disclose contracts, appointments and awards from various entities in the People’s Republic of China (PRC) to the U.S. Department of Energy.

Gang Chen, 56, was charged by criminal complaint with wire fraud, failing to file a foreign bank account report (FBAR) and making a false statement in a tax return. Chen will make an initial appearance today before Magistrate Judge Donald L. Cabell.

According to charging documents, Chen is a naturalized U.S. citizen who was born in China. He is a professor and researcher at MIT where he serves as Director of the MIT Pappalardo Micro/Nano Engineering Laboratory and Director of the Solid-State Solar Thermal Energy Conversion Center (S3TEC). Since approximately 2013, Chen’s research at MIT has been funded by more than $19 million in grants awarded by various U.S. federal agencies.

Since 2012, Chen has allegedly held various appointments with the PRC designed to promote the PRC’s technological and scientific development by providing advice and expertise – sometimes directly to PRC government officials – and often in exchange for financial compensation. This includes acting as an “overseas expert” for the PRC government at the request of the PRC Consulate Office in New York and serving as a member of at least two PRC Talent Programs. Since 2013, Chen allegedly received approximately $29 million of foreign funding, including $19 million from the PRC’s Southern University of Science and Technology (SUSTech).

It is further alleged that Chen’s efforts to promote the PRC’s scientific and economic development were partially detailed in a February 2016 email that Chen sent himself using his MIT e-mail account.  The email read:

1. promote chinese collaboration

2. China places innovation (scientific) as key and core not fashion [sic], but because

we must do it, from historic trend as well from our stage

3. our economy is no. 2, but from technology (structure of economy) and human

resources, we are far from no. 2

4. we are paying big price in environment, not sustainable, as well as from labor cost

5. environment protection and development in same place, environment even higher, clean energy if higher cost, reduce steel, cement. We must count on technology, cannot grow as past

6. communist 18th convention, scientific innovation placed at core. We realize not just independent innovation; but also internationalize to plan for and facilitate. Closed door innovation does not work; innovation as driving force

From at least 2017 to 2019 when Chen was serving in several advisory roles for the PRC and PRC entities, Chen applied for and obtained a U.S. Department of Energy (DOE) grant in order to fund a portion of his research at MIT.  In doing so, it is alleged that Chen failed to disclose information about his ongoing affiliations with the PRC as required by DOE.

Chen also allegedly failed to disclose to the IRS in his 2018 tax return that he maintained a bank account in the PRC with more than $10,000 in 2018.

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of making false statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of failing to file an FBAR provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Patrick J. Hegarty, Special Agent in Charge of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office; William S. Walker, Acting Special Agent in Charge of Homeland Security Investigation, Boston; Joleen Simpson, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Jim Breckenridge, Special Agent in Charge of the Department of Energy, Office of Inspector General made the announcement today. Assistant U.S. Attorneys B. Stephanie Siegmann, Chief of Lelling’s National Security Unit, and Jason Casey and Timothy Kistner also of Lelling’s National Security Unit are prosecuting the case with assistance from Trial Attorney David Aaron of the National Security Division’s Counterintelligence and Export Control Section.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

FBI Special Agent in Charge Joseph R. Bonavolonta delivered remarks at a press conference announcing charges against MIT professor Gang Chen in connection with allegedly failing to disclose contracts, appointments, and awards from various entities in the People’s Republic of China to the U.S. Department of Energy. Remarks prepared for delivery.

The FBI released the following statement:

It has become much too commonplace that the ruling Communist Party of China thinks it can conduct illegal activity, and bend people here in the United States to its will, in order to try and surpass our country as the world’s leading superpower.

Earlier this morning, we arrested Massachusetts Institute of Technology (MIT) Professor Gang Chen at his home in Cambridge, Massachusetts. Immediately after we took Chen into custody, we initiated the execution of three search warrants: one at his home and two others at MIT.

Our investigation found Chen was working with the Chinese Communist Government in various capacities dating back to 2012, at our country’s expense. And the real victims in this case are you—the taxpayers—who we believe he knowingly and willfully defrauded out of $19 million in federal grants by exploiting our system to enhance China’s research in nanotechnology.

In applying for these scarce federal grants, we allege Chen failed to disclose that he was acting as an “overseas expert” on science and technology for the Chinese Communist Government—after China’s Consulate Office in New York asked him to provide expertise and advice—in exchange for financial compensation and awards.

Through an extensive document review, we found Chen has accepted approximately $29 million in foreign funding, primarily from entities tied to the Chinese Communist Government. And through a variety of Chinese talent plans, Chen received at least $355,000 for his services and expertise; money which he never disclosed to MIT or the federal government.

We also believe he committed tax fraud by failing to file a foreign bank account report, disclosing that he had a bank account in China with at least a $25,000 balance in which he kept money paid to him by various entities in China, with ties to the Chinese government.

Additionally, while Chen was chair of MIT’s Department of Mechanical Engineering, and serving as an overseas advisor, we believe he even went as far as recommending several students to participate in various Chinese talent programs. And while serving as an advisor to the China Scholarship Council—he recommended several students to receive the “Chinese Government Award for Outstanding Students Abroad.”

The cutting-edge research and technologies that are being developed here in Massachusetts must be carefully protected from our foreign adversaries and the FBI will continue to do everything it can to safeguard these important innovations.

To put this threat into perspective, we have now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours. And of the 5,000 active counterintelligence cases the FBI has, nearly half of them are related to China. Each and every one of our field offices—including the Boston Division—have active investigations. And what needs to be made clear is that the Chinese Communist Government doesn’t play by the same rules of academic integrity and freedom that we do.

We know they use some Chinese students in the U.S. as non-traditional collectors to steal our intellectual property. We know that through their “Thousand Talents Plan” and similar programs, they try to entice researchers at our universities to bring their knowledge to China—even if that means stealing proprietary information or violating export controls or conflict-of-interest policies to do so.

We also know they support the establishment of institutes on our campuses that are more concerned with promoting Communist Party ideology than independent scholarship. They try to pressure Chinese students to self-censor their views while studying here, and they use campus proxies to monitor both U.S. and foreign students and staff. And we know they use financial donations as leverage, to discourage American universities from hosting speakers with views the Chinese Communist Government doesn’t like.

But let me be clear: We are not suggesting that all, or even most, Chinese students, professors, and researchers are somehow up to no good. There is no question that we benefit greatly from foreign researchers in our academic institutions. However, some of them are exploiting this collaborative environment, as illustrated by this case, and it needs to stop.

We want our academic and private sector partners to reach out to us if they see something that concerns them. We’re going to keep working to build trusted relationships with them, so that they know—with confidence—that we’re here to help.

I’d like to thank the agents and analysts from all the respective agencies standing before you today who worked incredibly hard on this investigation, as well as U.S. Attorney Lelling and his prosecutors for their continued partnership and support. This was truly a team effort.
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