An El Cerrito woman currently living in China faces prison and hefty fines after a federal grand jury indicted her and a colleague for bilking the government out of more than $1 million.
Federal investigators allege that Yang Zhao lied on grant applications to the NSF and NASA while she was an employee of San Jose-based Atlas Scientific. Investigators also say that Zhao misprepresented her status at UC Berkeley.
A copy of the indictment is attached to this article as a PDF, and the full press release is below:
SAN JOSE - A federal grand jury in San Jose indicted Ali Kashani, of San Jose, and Yang Zhao, of El Cerrito, Wednesday with wire fraud and conspiracy to commit wire fraud, United States Attorney Melinda Haag announced. Mr. Kashani was also indicted for money laundering.
According to the indictment, Mr. Kashani, 52, and Ms. Zhao, 40, through their scientific research company, Atlas Scientific, are alleged to have defrauded the National Science Foundation (NSF) and the National Aeronautics and Space Administration (NASA) by creating the false impression that they had not applied for overlapping Small Business Innovation Research (SBIR) grants with both NSF and NASA. The SBIR program requires that grantees disclose similar or “essentially equivalent” research proposals the grantee has submitted to other federal agencies.
Atlas Scientific, a San Jose-based research company, performed research into adhesive tape based on carbon nanotubes. Mr. Kashani, the owner and founder of Atlas Scientific, and Ms. Zhao, Atlas’s principal investigator, applied for and received multiple research grants from NSF and NASA. During each application process, Mr. Kashani and Ms. Zhao allegedly denied having submitted overlapping project proposals to both NSF and NASA. Mr. Kashani and Ms. Zhao also allegedly denied already having received funding from NSF and NASA, when they requested additional grant monies.
Ms. Zhao is additionally alleged to have misrepresented her employment status with the University of California Berkeley, when she applied for these grants.
Yesterday, Mr. Kashani was arrested, and made his initial appearance in federal court in San Jose. Mr. Kashani is currently detained pending a hearing on Tuesday, April 2 at 9:30AM before Magistrate Judge Grewal.
Ms. Zhao is currently living in the People’s Republic of China.
The maximum penalty for each count of Conspiracy to Commit Wire Fraud in violation of Title 18, United States Code, Section 1349, and for the substantive Wire Fraud counts, is 20 years imprisonment and a fine of $250,000 fine, or twice the gross gain or gross loss from the offense, plus restitution.
The maximum penalty for each count of Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, in violation of Title 18, United States Code, Section 1957(a), is 10 years imprisonment and a fine of $250,000 fine, or twice the amount of the criminally derived property involved in the transaction, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kamille Singh. The prosecution is the result of an investigation by the National Science Foundation Office of the Inspector General, NASA Office of the Inspector General, and the Internal Revenue Service Criminal Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Kashani and Ms. Zhao must be presumed innocent unless and until proven guilty.