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MIT professor accused of fraudulently obtaining federal grants; failed to disclose contracts in China

MIT faculty member Gang Chen.
MIT faculty member Gang Chen.MIT

A professor at the Massachusetts Institute of Technology has been charged with failing to disclose ties to China when applying for a federal grant, a case law enforcement officials said was part of a campaign to prevent the rival superpower from siphoning off US technology.

Gang Chen, 56, allegedly failed to disclose contracts, appointments, and awards from various entities in China when applying for a grant from the US Department of Energy, the US Attorney’s office in Boston said.

Chen was charged with wire fraud, failing to file a foreign bank account report, and making a false statement in a tax return, prosecutors said. Chen was released Thursday on $1 million bond and ordered to surrender his passport.

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Since approximately 2013, Chen’s research has been funded by more than $19 million in grants awarded by various US federal agencies, prosecutors said.

“Based on the sheer extent of Chen’s foreign connections as described in the complaint, he was working for the Chinese government while securing US research dollars,” US Attorney Andrew E. Lelling said at a news conference.

“The bottom line is that the Chinese government would rather siphon off US technology instead of doing the work themselves,” Lelling added. “In pursuit of that goal, the Chinese government targets US researchers for recruitment. The US government has a right to know whether its research dollars, public tax dollars, are funding research by people who are also receiving substantial sums from a foreign power.”

It’s the second recent case of a high-ranking professor in the Boston area being charged with concealing ties to China. Harvard University Professor Charles Lieber was charged last year with failing to disclose financial ties to a Chinese government program and cheating on his federal taxes.

A naturalized US citizen who was born in China, Chen serves as director of the MIT Pappalardo Micro/Nano Engineering Laboratories and director of the Solid-State Solar Thermal Energy Conversion Center, prosecutors said.

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Since Chen moved to the US more than 30 years ago, his life “has been the epitome of the American dream,” Chen’s attorney, Robert Fisher, said in a statement.

“He has dedicated his life to scientific advancement in mechanical engineering. He loves the United States and looks forward to vigorously defending these allegations,” Fisher said.

Joseph Bonavolonta, special agent in charge of the Boston FBI office, said Chen was arrested Thursday morning at his Cambridge home.

“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,” Bonavolonta said.

He said some Chinese students are being used as “non-traditional collectors to steal our intellectual property” and that Chinese government talent programs are being used to “try to entice researchers at our universities to bring knowledge to China, even if that means stealing proprietary information or violating export controls or conflict of interest policies to do so.”

Chen not only hid his affiliations but actively worked to further the goals of the Chinese government while employed by MIT, authorities said. In a statement, MIT said it was “deeply distressed” by Chen’s arrest.

“MIT believes the integrity of research is a fundamental responsibility, and we take seriously concerns about improper influence in US research,” the university said. “Prof. Chen is a long-serving and highly respected member of the research community, which makes the government’s allegations against him all the more distressing.”

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Since 2012, prosecutors alleged, Chen has held various appointments with the People’s Republic of China designed to help the country in science and technology by providing advice and expertise – sometimes directly to Chinese government officials. He often received financial compensation, prosecutors said.

Chen acted as an “overseas expert” for the Chinese government at the request of the Chinese consulate in New York and served as a member of at least two Chinese talent programs designed to bring foreign scientific expertise to China, prosecutors said. Since 2013, Chen allegedly received approximately $29 million of foreign funding, including $19 million from China’s Southern University of Science and Technology.

Prosecutors allege that from at least 2017 to 2019, Chen obtained a US Department of Energy grant to fund part of his research at MIT. When he applied, he allegedly failed to disclose information about his ongoing affiliations with the Chinese government as required. Federal officials at the news conference suggested he would not have received the grant if he had disclosed the ties.

Chen also allegedly failed to disclose to the US Internal Revenue Service in his 2018 tax return that he maintained a bank account in China, where he kept the money paid to him by various entities tied to the Chinese government.

The most serious charge Chen faces — wire fraud — carries a maximum penalty of 20 years in prison, three years of supervised release, and a fine of up to $250,000.

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John R. Ellement can be reached at john.ellement@globe.com. Follow him on Twitter @JREbosglobe. Martin Finucane can be reached at martin.finucane@globe.com.