United States District Court, W.D. Virginia, Roanoke Division
Michael F. Urbanski, Chief United States District Judge.
February 21, 2019, this court found defendant Yiheng Percival
Zhang guilty of conspiracy to defraud the United States under
18 U.S.C. § 371 (Count One), aiding and abetting the
submission of false statements under 18 U.S.C. §§.2
and 1001(a)(2) (Counts Three, Four, and Five), and
obstruction of justice under 18 U.S.C. § 1519 (Count
Twelve). Zhang, with the consent of the government, waived
his right to a jury trial, and this case was tried before the
has moved for judgment of acquittal as to Counts One, Three,
Four, and Five, arguing insufficiency of the evidence and
claiming no reasonable fact-finder could convict on these
counts. ECF No. 185. The government disagrees and urges the
court to affirm the guilty verdict on these counts. Zhang did
not move for acquittal as to Count Twelve, charging
obstruction of justice.
careful review of the trial record and arguments of counsel,
the court concludes that the government submitted sufficient
evidence for a reasonable fact-finder to find Zhang guilty of
conspiracy and of aiding and abetting the submission of false
statements as charged in Counts One, Three, Four, and Five.
Accordingly, the motion for judgment of acquittal, ECF No.
185, is DENIED.
the court assumes the parties are familiar with the findings
of fact outlined in the Findings of Fact and Conclusions of
Law, ECF No. 184, the facts pertinent to Counts One, Three,
Four, and Five are summarized below.
founded Cell-Free Bioinnovations, Inc. ("CFB") and
served as its President and Chief Scientific Officer at all
times relevant to these charges. ECF No. 184, at 5. A small
research company, CFB relied exclusively on grant funding for
its programs. Id. at 8. Three CFB proposals to the
National Science Foundation ("NSF") are at the
heart of this Rule 29 motion: the "Inositol 1"
grant proposal, "Sugar Phosphate" grant, and
"Inositol 2" grant proposal.
three proposals fell into two categories of grants: Small
Business Innovation Research ("SBIR") and Small
Business Technology Transfer Research ("STTR"). ECF
No. 184, at 9. Both categories aim to promote innovation in
the private sector by providing early-stage capital to
entrepreneurs. Id. The proposal process is highly
competitive; generally, only 10-20% of proposals receive
funding. Id. at 10. The process begins with a public
solicitation, which lays out the requirements grant
recipients must meet and references specific policies, terms,
and conditions with which applicants must comply.
Id. at 10, 45. Before submission, an Authorized
Organizational Representative ("AOR") must
electronically sign various certifications. One such
certification specifies that "[b]y electronically
signing and submitting this proposal, the Authorized
Organizational Representative or Individual Applicant is . .
. agreeing to accept the obligation to comply with NSF award
terms and conditions if an award is made as a result of this
application." ECF No. 126, at 2-3.
all NSF solicitations, the solicitations to which CFB
responded with the Inositol 1, Sugar Phosphate, and Inositol
2 proposals state that "[a]ny proposal submitted in
response to this solicitation should be submitted in
accordance with the revised NSF Proposal & Award Policies
& Procedures Guide (PAPPG) (NSF 15-1), which is effective
for proposals submitted, or due, on or after December 26,
2014." ECF No. 184, at 46; Ex. 2A, at 1 (relating to
Inositol l); Ex. 1A.1 (relating to Sugar
Phosphate); Ex. 3A (relating to Inositol
The PAPPG defines the responsibilities of the NSF and the
grantee as follows:
(1) NSF agrees to provide up to a specified amount of
financial support for the project to be performed under the
conditions and requirements of the grant. NSF will monitor
grant progress and assure compliance with applicable
(2) The grantee agrees to: perform the project as proposed;
the prudent management of the funds provided; and carry out
the supported activities in accordance with the provisions of
Ex. 1A.3, at 15. The PAPPG also states that "[t]he
same work cannot be funded twice." Id., at 32.
The PAPPG's Proposal Preparation & Submission
Guidelines require disclosure of "all current and
pending support for ongoing projects and proposals,
including this project, and any subsequent'
funding in the case of continuing grants. All current project
support from whatever source (e.g. Federal, State, local or
foreign government agencies, public or private foundations,
industrial or other commercial organizations) must be
listed." Id. at 54 (emphasis in original). The
PAPPG's Award & Administrative Guidelines state that
"[t]he acceptance of an award from NSF creates a legal
duty on the part of the grantee organization to use the funds
or property made available in accordance with the terms and
conditions of the award." Ex. P-1.aiii, at 119. These
policies are consistent with the testimony of Dr. Prakash
Balan, a Program Director at NSF. Balan emphasized that grant
funds are not awarded for research that is already completed
and that, with the exception of a 7 percent profit margin,
grant awards must be spent on the subject of the grant. ECF
No. 184, at 46-47.
government introduced extensive email evidence in which Zhang
repeatedly discussed his scheme to obtain federal grant funds
via the Inositol 1, Sugar Phosphate, and Inositol 2 grant
proposals, for research that had already been completed in
China. Zhang's emails indicated he that
planned to impermissibly use significant portions of any
awarded grants to fund other projects.
Three, Four, and Five of the superseding indictment charged
Zhang with aiding and abetting false statements made in a
matter within the jurisdiction of the executive branch of the
Government of the United States, within the Inositol 1, Sugar
Phosphate, and Inositol 2 grant proposals respectively. The
superseding indictment alleged that these proposals
"falsely represented the funds sought would be used to
fund new research on certain matters, when, in fact, the
funds were to be used for other purposes." ECF No. 63,
at 9. Plainly, the superseding indictment provided Zhang with
notice of the false statements charged such that he could
prepare his defense. In particular, the superseding
indictment identified (1) the three NSF proposals, (2) the
false certifications, and (3) the reason the certifications
were false. Nevertheless, Zhang filed a motion for a bill of
particulars to which the court directed the government to
respond. At a pretrial conference held on August 7, 2018, the
government indicated that it would respond to the motion for
bill of particulars that day that will provide defendant with
some information. Crim. Mins., ECF No. 125. In its response,
the government stated: "While the government's
position is that the superseding indictment fairly apprises
the defendant of the charges so that he can prepare a defense
and avoid surprise at trial, the government is also providing
the following information out of an abundance of
caution." ECF No. 126, at 1. At a subsequent pretrial
hearing held on August 24, 2018, the court inquired about the
bill of particulars issue. Zhang's counsel stated that
the response received was substantive, helpful, and
alleviated concerns and had no issue to raise with the court.
Crim. Mins., ECF No. 132.
government's response to the motion for bill of
particulars as to Counts Three, Four, and Five all follow a
similar pattern. The response identified the same false
representation, rationale, and omissions for each proposal.
The false representation and rationale were:
By electronically signing and submitting this proposal, the -
Authorized Organizational Representative or Individual
Applicant is: (1) certifying that statements made herein are
true and complete to the best of his/her knowledge; and (2)
agreeing to accept the obligation to comply with NSF award
terms and conditions if an award is made as a result of this
application.' This statement is false in that the
defendant and CFB had no intention of complying with NSF
award terms and conditions.
ECF No. 126, at 2-3. As to all three counts, the response
also listed omissions consisting of the "Failure to
disclose the relationship between Yiheng Percival Zhang and
the Tianjin Institute of Industrial Biotechnology, Chinese
Academy of Sciences, Tianjin, China; (2) Failure to disclose
that much, if not all, of the work set forth in the attached
Proposal had already been done and/or funded in China; and
(3) Failure to disclose the intended use of the grant
funds." Id. at 2-4.
government alleged, and the court found, that Zhang worked to
obtain competitive NSF awards for projects that he admitted
had already been completed in China, in violation of grant
requirements that the grants be for new work to be done in
the United States. ECF No. 184, at 2. The court found that
the evidence showed, beyond a reasonable doubt, that Zhang is
guilty of aiding and abetting the submission of false
certifications in the Inositol 1, Sugar Phosphate, and
Inositol 2 proposals. ECF No. 184, at 52, 59, 61. In Count
One, the court also found Zhang guilty of conspiracy to
defraud the United States by making these false
representations. ECF No. 184, at 40.
court now turns to the merits of the motion for acquittal.
Rule 29 of the Federal Rules of Criminal Procedure states
that "the court may set aside the verdict and enter an
acquittal" if the defendant so moves within 14 days of
the verdict. Fed. R. Crim. P. 29(c).
is only one ground for a motion for judgment of acquittal.
This is that the evidence is insufficient to sustain a
conviction of one or more of the offenses charged in the
indictment or information." 2A Charles A. Wright,
Federal Practice and Procedure: Criminal § 466
(4th ed. 2016) (internal citations omitted). "A judgment
of acquittal based on the insufficiency of evidence is a
ruling by the court that as a matter of law the
government's evidence is insufficient 'to establish
factual guilt' on the charges in the indictment."
United States v. Alvarez., 351 F.3d 126, 129 (4th
Cir. 2003) (quoting Smalis v. Pennsylvania., 476
U.S. 140, 144 (1986)). "The test for deciding a motion
for a judgment of acquittal is whether there is substantial
evidence (direct or circumstantial) which, taken in the light
most favorable to the prosecution, would warrant a
¶¶ finding that the defendant was guilty beyond a
reasonable doubt." United States v.
MacCloskey., 682 F.2d 468, 473 (4th Cir. 1982).
"[Substantial evidence is evidence that a reasonable
finder of fact could accept as adequate and sufficient to
support a conclusion of a defendant's guilt beyond a
reasonable doubt." United States v. Burgos, 94
F.3d 849, 862 (4th Cir. 1996). Accordingly, a court must deny
a defendant's motion if the evidence presented at trial,
viewed in the light most favorable to the government, is
sufficient for a rational juror to find each element of the
offense beyond a reasonable doubt. United States v.
United Med. & Surgical Supply Corp., 989 F.2d 1390,
1402 (4th Cir. 1993) (citing Jackson v. Virginia.
443 U.S. 307, 319 (1979)): see also United States v.
Friske., 640 F.3d 1288, 1290-91 (11th Cir. 2011)
("In reviewing a sufficiency of the evidence challenge,
we consider the evidence in the light most favorable to the
[g]overnment, drawing all reasonable inferences and
credibility choices in the [g]overnment's favor.").
Three, Four, and Five all involve charges associated with
aiding and abetting die submission of false representations.
To find Zhang guilty of these charges, the court must be
convinced beyond a reasonable doubt that Zhang committed the
specific crime as charged. The pertinent statute, 18 U.S.C
§ 1001, states:
[W]hoever, in any matter within die jurisdiction of the
executive, legislative, or judicial branch of the Government
of the United States, knowingly and willfully . . . makes any
materially false, fictitious, or fraudulent statement or
representation . . . shall be guilty of an offense against
the United States.
18 U.S.C. § 1001(a)(2). "The essential elements of
a § 1001(a)(2) offense are, as follows: 1. [a] material
statement or representation; 2. [w]hich is false, fictitious,
or fraudulent, 3. [m]ade in a matter within the jurisdiction
of a department or agency of the United States; and 4. [d]one
knowingly and willfully." United States v.
Stover, 499 Fed.Appx. 267, 272-73 (4th Cir. 2012)
(citing United States v. Camper, 384 F.3d 1073, 1075
(9th Cir. 2004)). "[T]he terms 'knowingly and
willfully' modify only the making of 'false,
fictitious or fraudulent statements.'"
United States v. Yermian, 468 U.S. 63, 69
(1984). "P]n the context of false statement
prosecutions, when the indictment has specifically alleged
die facts that show the defendant's statement is false,
the government must prove the statement is untruthful for the
reason alleged in the indictment." United States v.
Mallory., No. 1:17-CR-154, 2018 WL 4997641, at *8 (E.D.
Va. Oct. 15, 2018) (citing United States v. Hoover.,
467 F.3d 496 (5th Cir. 2006); United States v.
Crocker, 568 F.2d 1049, 1060 (3d Cir. 1977)).
Counts Three, Four, and Five, criminal liability is premised
on Zhang's conduct in aiding and abetting others to make
false statements. 18 U.S.C. § 2 states:
(a) Whoever commits an offense against the United States or
aids, abets, counsels, commands, induces, or procures its
commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if
directly performed by him or another would be an offense
against the United ...