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How a secret Chinese-run lab in Reedley illegally stored vials of COVID-19
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https://www.fresnobee.com/news/local/art...36263.html      Wednesday, September 6, 2023

Today's eEdition      How a secret Chinese-run lab in Reedley illegally stored vials of COVID-19, infectious diseases BY TIM SHEEHAN UPDATED AUGUST 07, 2023 10:45 AM

Reedley code enforcement officer Jesalyn Harper describes how she discovered the illegal storage use of a warehouse by Chinese-owned Prestige Biotech. BY ERIC PAUL ZAMORA

Jesalyn Harper, the city of Reedley’s code enforcement officer, thought the call would be routine - following up on an anonymous complaint about a business operating without a permit in an old warehouse. But when she found a jury-rigged garden hose sticking through a rear wall and a ventilation fan blowing foul-smelling air through an opened back door, things took a turn. Harper knocked on the front door of the decades-old cold-storage warehouse for an inspection. What she discovered inside on that December day was almost the stuff of science fiction: Dozens of refrigerators filled with vials of blood, viruses and bacteria; containers of chemicals; hundreds of laboratory mice; and an array of stored laboratory equipment – all inside an unpermitted business operating illegally. “I wasn’t looking for an unpermitted lab,” Harper told The Fresno Bee this week. “I was just looking for an unpermitted business.” Prestige Biotech Inc., a company whose owners live in China, was using the building near Reedley’s downtown for storing and shipping an array of diagnostic test kits for COVID-19, pregnancy, drugs and more after apparently being booted out of their Fresno location in late 2022. The inventory of biological agents in the refrigerators include coronavirus and other exotic contagions, such as malaria, Hepatitis B and C, chlamydia, human herpes, and rubella, among others, used in the production of various test kits. Now, eight months after the surprising discovery, and about five months after the lab was shut down, local, state and federal agencies continue to investigate and clean up a business that has existed within a murky and muddled realm of regulatory authority. It’s apparently a first-of-its kind situation for investigators in the U.S. – even as court documents show that the company is in the midst of efforts to relocate back to Fresno. “We’re finding out that with these private labs, there really isn’t as much regulation as there is for publicly funded labs, labs that receive grants,” said Harper, who has been involved in the investigation since Dec. 19. “There’s no one technically looking for them.” The lab inside the warehouse in downtown Reedley operated from December through March, when city officials deemed the building unsafe and padlocked it. The removal of equipment, medical devices and chemicals inside may take another month or two. As news of the lab’s existence and closure broke last week, The Bee decided to take a deep look at how the illicit lab was able to operate, how it was discovered and shut down, and how news of its existence sparked conspiracy theories rooted in distrust of China and debate over the origins of COVID-19. We spoke to numerous investigators and reviewed hundreds of pages of court documents to compile this report. DEADLY VIRUSES, ‘AT LEAST 20 POTENTIALLY INFECTIOUS AGENTS’ Prestige Biotech Inc., a company incorporated in Nevada but whose owners live in China, and its predecessor Universal Meditech Inc. previously operated for several years in an industrial building in south Fresno. Following a fire at that site, and amid a dispute with its landlord, the owners relocated the lab and its equipment to leased space inside the Reedley warehouse at 850 I St. According to experts assisting the city, the lab looked like it was set up for shipping already-assembled test kits and for storage of components, chemicals, and biological agents used to develop test kits, Harper said. Investigators with the U.S. Centers for Disease Control determined in May that the Reedley warehouse had “at least 20 potentially infectious agents” besides the COVID-19 virus stored in its refrigerators, according to documents filed in Fresno County Superior Court. Those bacterial, viral and parasitic materials included chlamydia, E. coli, streptococcus, Hepatitis B and C, human herpes, HIV (the virus that causes AIDS), rubella and malaria. In addition to numerous code violations at the site, an array of potentially toxic chemicals was also discovered when officials with the city of Reedley and the Fresno County Department of Public Health were able to make a full site inspection in March, Harper said.

Harper added that part of the warehouse was partitioned as a makeshift plywood room with boxes containing nearly 1,000 laboratory mice, almost 200 found dead. A news report in the Mid Valley Times, a local Reedley newspaper, about the cleanup gave rise to rampant speculation on social media about the laboratory and its operations and potential connections to China. Fresno City Councilmember Garry Bredefeld, capitalizing on the brewing social media furor, blasted Fresno County health officials and the county Board of Supervisors in a press conference Monday, accusing them of concealing news about the lab for months since its closure in March until the Reedley newspaper wrote about it last week. He called for county leaders “to let people know what’s going on.” The COVID pandemic that reached the Fresno region in March 2020 “resulted in the destruction of lives, livelihoods, the economy and business,” Bredefeld said of national, state and local safety mandates that closed businesses and schools or required people to wear masks in public – repeating a criticism he has often voiced. “We had officials locally that were silent and complicit with all the unconstitutional and destructive government orders.” “And now they’re silent again,” he said in reference to the Reedley lab. Joe Prado, assistant director of the Fresno County Department of Public Health, said an emergency declaration for the site was not deemed necessary because the property had been shut down and contained in early March by Reedley city officials. “There wasn’t a public notice because it didn’t meet the criteria for an emergency declaration,” Prado told The Bee. “During this entire time as we are evaluating this process, and all of the 14 federal and state agencies that we’re coordinating with, this is still an ongoing investigation,” Prado said. “There are going to be some things we can’t talk about” because federal and state agencies are still investigating, he added. Among the agencies involved are the Centers for Disease Control, the U.S. Food & Drug Administration, the U.S. Environmental Protection Agency, the Federal Bureau of Investigation, the state Department of Toxic Substances Control, and the state Department of Public Health and its agencies dealing with medical waste and laboratory field services. “I can’t speak to any criminal charges because there is this ongoing investigation,” Prado said. “There’s a challenge of finding a balance between maintaining the integrity of the investigation and making sure this doesn’t happen again in Fresno County.” Harper said Tuesday that more information didn’t come out earlier because “it took time to get all of this (investigation) together.” “Our response time was longer because this is an unprecedented event,” she said, adding that CDC and FDA officials said a lab situation like this has not been found before in the U.S. “We’re all trying to figure out what we can do, who’s in charge of what, how to organize this, who goes in first. All of that is being learned while we’re going through this process.” “We’re literally writing the policy and procedure as we’re going along,” Harper added. ‘GENETICALLY MODIFIED’ MICE PROMPT SPECULATION Court documents include a reference to a March 3 statement by Xiuquin Yao, reportedly the president of Prestige Biotech, that indicated mice found at the site were “genetically modified to catch and carry the COVID-19 virus” for testing related to development of diagnostic testing kits. “At that point in time, that sparked a lot of concern for us,” Harper said, adding that Yao’s English language skills were limited. A subsequent inspection by consulting veterinarian Nina Hahn, who has worked as an attending veterinarian for several California universities and research labs, clarified that the mice, while under distress and in neglected conditions, did not appear to be sick or injected with any infectious agent and were simply being stored at the Reedley lab, not subjected to experimentation. Bredefeld, in his press conference Monday, asserted that the Reedley lab “was producing COVID-19,” and he questioned “what was the purpose and goals of their experimenting with COVID-19 and having mice catch and carry the disease?” The council member – who is also running for a seat on the Fresno County Board of Supervisors – also raised concerns about Reedley’s proximity to Lemoore Naval Air Station in neighboring Kings County, which is the U.S. Navy’s West Coast base for squadrons of FA-18 Super Hornet strike fighter jets. The Navy base is about 35 miles from Reedley. “In a war with China, these are the aircraft that we would rely upon to sink Chinese naval vessels and give us victory,” Bredefeld said, quoting an unsubstantiated social media post. He added his own question during his press conference: “Is the location of this lab coincidence or purposeful?” Bredefeld acknowledged the speculative nature of what he was repeating. “I haven’t verified anything,” he said in response to questions. “I raised the speculation: Could it be a possibility? … Yes, speculation, I was clear that’s what it is.” On Tuesday, Harper – who has been involved with the investigation since December – discounted such speculation as inaccurate and damaging. “I understand how the rumor (about the mice) got started, but it’s been debunked by the veterinarian, and it’s not valid,” Harper said. “The other thing is the idea that they were making some kind of superweapon to take out Lemoore, … unless Lemoore was planning on buying a high volume of pregnancy tests,” she added. “When I see that kind of hysteria going on, it’s unwarranted. It’s putting stress on people that really don’t need it, and it’s just not true.” Prado dismissed the assertion that the lab “was producing COVID-19,” noting that there was no indication that was happening at the site. The mice, he added, were part of the process of determining whether the test kits manufactured by the company were valid in detecting the virus. “That’s the extent of what COVID looked like in that room,” he said. Fresno County’s interim health officer, Dr. Rais Vohra, issued three separate health officer orders to the company – on April 21, May 31 and June 9, each also posted as public notices to the health department’s website. The first ordered the lab’s operators to produce an inventory of materials, chemicals and equipment. The subsequent orders called for the closure of business operations and abatement of any biological materials at the lab site – orders that Prestige Biotech and its officials appeared to ignore. HOW THE CLANDESTINE LAB CAME TO LIGHT Prestige Biotech leased most of the southern half of the sprawling building at 850 I Street near downtown Reedley and along one of the city’s main thoroughfares. Harper said that on Dec. 19, she received an anonymous complaint about a possibly unlicensed business in the supposedly vacant warehouse. “All of a sudden there were at least four cars there parked there at any time,” she said. After a drive-by when she saw cars parked at the entrance, she drove around to the rear of the building and discovered a garden hose protruding from a hole drilled through the warehouse wall and running the length of the building. “That’s a violation because this portion of the warehouse is cold storage from back in the 1950s when this was built,” Harper said. “I thought, ‘They’ve got no plumbing, but they’re doing something where they need water.’” A nearby doorway was blocked open by a broom or mop handle, and it had an exhaust fan blowing out of the building. “It reeked, the smell was horrible,” Harper said. The fan was being used to blow air, dander and odors from the room where the mice were housed.

Together, the hose and door provided enough cause for Harper to return to the front of the building and ask for access to do a preliminary inspection, she said. A woman in a lab coat, gloves and a surgical mask answered the door and allowed Harper to enter. She said that she and several other women working at tables were boxing up already-packaged pregnancy tests for shipping. As the women accompanied Harper to the corner of the building where the hose was protruding, she said she noticed the refrigerators, the plywood room for the mice, and manufacturing equipment that was wrapped up and being stored. The hose was connected to a sink as a water source. “When I was going through and seeing all the refrigerators and freezers, one of my main concerns is they had non-permitted electrical installed for all of these refrigerators to be plugged into,” Harper said. “It’s a big concern for a fire hazard.” “Then we had this room with these mice that had a ventilation system and lights, and that was all non-permitted as well,” she added. Harper and other code officers assisting could see vials of blood or other materials in some of the refrigerators that had glass doors, so they retreated from the building and called the county health department’s Environmental Health Division. There, a health inspector examined Harper’s emailed photos and explained that the company previously operated in Fresno and that the county had been looking for them. Together, the county and city decided within a day or two of the Dec. 19 visit to make a referral to the FBI. “We didn’t realize what possible crimes could be going on, or how safe it would be for us to return to the property,” Harper said. The FBI looked into the case and in late January responded that it was safe for city code enforcement and county health officials, and any other enforcement agencies to return, Harper said. Between a March 16 inspection and April 12, when Harper and veterinarian Hahn returned with an abatement warrant, Harper said it fell to her to feed and water the mice. Harper and Hahn determined that by April 12, 178 mice had died; the remaining 773 were euthanized and ultimately incinerated, except for 10 specimens now in custody of the Reedley Police Department, according to court documents. ///Harper told The Bee this week that the dead mice are being stored in a police evidence freezer that’s cold enough to preserve DNA and cells. The mice were preserved “for the owners to reclaim as a result of the abatement,” Harper added. “However, no one has come forward to claim the mice.”/// AN ONGOING LACK OF COOPERATION Harper and other city officials weren’t the only ones facing a lack of cooperation from representatives of Prestige Biotech. Prado, the county’s assistant health department director, told The Bee this week that before and even after Vohra issued the first county Health Officer Order in April, the company “either had given us misinformation, didn’t understand what we were asking, or intentionally just misled us completely.” “That was really troubling that the business owner wasn’t forthcoming with information,” he added. Representatives at the lab “stated that the owner lived in China,” Prado said. “We wanted to interview them face to face, (but) they always presented multiple barriers to be able to really discuss directly with the president and owners of the company.” Over three days, July 5-7, Fresno County carried out an abatement warrant at the warehouse to clear out the various biological materials and medical waste, as well as containers and equipment that had been contaminated, according to court records. A total of of 127 containers of biological material and medical waste – each holding about 44 gallons – were removed WHAT’S HAPPENING NOW, AND WHAT’S NEXT? By Tuesday morning, the 36 refrigerators and freezers had been moved to a covered outdoor area of the property. Before they can be dismantled and recycled, environmental regulations require that the refrigerant chemicals be drained and contained. And in an alcove of the building, visible through open roll-up doors facing I Street, were dozens of boxes bearing taped seals labeling the contents as “embargoed” by the state health department. Those, Harper said, contained various types of already-assembled test kits, as well as components for the manufacture of additional test kits.

In a telephone interview with The Bee, Fresno County Supervisor Nathan Magsig said he became aware of the Reedley lab in March “I think if someone just took the time to look at what this site is, what’s been done and what is the true level of concern – if you look at the whole thing … it shouldn’t rise to the level of alarm bells today,” Magsig said. “Garry (Bredefeld) didn’t give me a call; I’m not aware of him calling anyone at the county to try to get that information.” Bredefeld said at his press event Monday that he had not contacted any of the members of the Board of Supervisors or the county health department. How this story was reported Several days of reporting for this story included interviews with Joe Prado, assistant director of the Fresno County Department of Public Health; Jesalyn Harper, code enforcement officer for the city of Reedley; Fresno County Supervisor Nathan Magsig; coverage of press conference comments from Fresno City Councilmember Garry Bredefeld; examination of the U.S. Food & Drug Administration medical-device recall database; reviewing and synthesizing more than 370 pages of Fresno County Superior Court documents related to inspection and abatement warrants issued for the Prestige Biotech Inc. laboratory in Reedley and litigation against Universal Meditech Inc., operator of the lab when it was in Fresno; and queries to the city of Fresno. Unsuccessful efforts were made to contact representatives of Universal Meditech Inc., operator of the lab when it was in Fresno.

This story was originally published August 3, 2023, 4:38 PM.
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