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Qingdao.[1]) Zhu estimated that this intellectual property would greatly benefit him and PRC state-affiliated entities indicating in a 2013 business plan that the combined market value of assets he brought to the PRC was “estimated at $1.37 billion.”[2]

In 2016, after years of litigation with XY over his IP theft, the Supreme Court of British Columbia, found Zhu guilty of “fraud on an ‘epic scale’ that ‘resulted in one of the largest awards in a Canadian court.’”[3] The court found that “Zhu, whose operations extend to China as well as Canada, plann[ed] to steal the technology to the point where XY’s market would collapse.”[4] The IP theft directly benefited PRC state-controlled enterprises like some of Zhu’s PRC-based companies, and it also benefited IND Group’s “two head offices in China, in Beijing and Qing[d]ao.”[5]

The court found that Zhu and his PRC co-conspirators made many disturbing statements as part of their plan. These include instances where Zhu, in response to a co-conspirator’s reference to “American imperialism,” replied that “the law is strong, but the outlaws are ten times stronger.”[6] In another instance, Zhu claimed that his fraudulent activity would help “defeat the American aggressor and wild ambitious wolf!”[7]

The Canadian court found Zhu and his co-conspirators guilty of civil IP theft, conspiracy, and other claims, issuing a $330 million judgment against them in June 2016. Zhu failed to appear before the court for sentencing, resulting in the judge issuing an arrest warrant for civil contempt of court, which carries a prison sentence of six months.[8] Zhu then fled Canada.

  1. Id. Zhu operated additional companies, who are also codefendants in the Canadian court case, in Qingdao as well, including Ai De Qingdao, which is linked to the PRC affiliate of Universal Meditech Incorporated, the corporation involved in the Reedley lab. See id.; infra at pg. 32.
  2. XY, LLC v. Canadian Topsires Selection Inc., 2016 BCSC 1095.
  3. Keith Fraser, B.C.-Based Businessman Employees Ordered to Pay $330m in Damages, Vancouver Sun, (Jun. 12, 2016).
  4. Id.
  5. XY, LLC v. Canadian Topsires Selection Inc., 2016 BCSC 1095.
  6. Id.
  7. Id. These statements are from 2011 and 2010, respectively.
  8. Keith Fraser, Canadian businessman facing jail over fraud has appealed stayed following no-show, Vancouver Sun (Jul. 14, 2016).

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