Three Charged in $9 Million Research Grant Fraud Scheme in New York
On February 24, 2016, Bin Wen (a.k.a. Ben), his wife Peng Zhang (a.k.a. Jessica), and Ben’s brother Haifang Wen (a.k.a. Harry) were arrested by Federal agents and charged with conspiracy, false claims, wire fraud and money laundering related to a $9 million research grant fraud scheme.
Ben Wen serves as the Chief Scientist and Vice President of United Environment & Energy, LLC (UEE), located in Horseheads, NY. He is also the owner of KEW Technologies, Inc. (KEW), located in Elmira, NY. Jessica Zhang is identified as UEE’s President. Harry Wen has served as an Assistant Professor at Washington State University (WSU) since 2008, and is the Director of the Washington Center for Asphalt Technology. Harry Wen was also the President and owner of the now-defunct Advanced Engineering Research (AER), LLC, and is the President and owner of National Technology Development, LLC (NTD), an active business entity in Horseheads, NY.
It is alleged that beginning in or about 2006 through September 2015, the subjects, through their various business entities, collectively engaged in a scheme to defraud the Federal Government of approximately $9 million in research contract/grant funds distributed by DOT, the Department of Energy, the National Science Foundation (NSF), and the Department of Agriculture. Allegations include that they fabricated letters of support and investment by sham investment companies and non-existent individuals; provided false information in research proposals and in reports regarding business entities, employees, facilities, etc.; and provided false reports and emails regarding how the federal research funds were expended.
The investigation identified fraudulent submissions on a contract valued at $999,940 for the FHWA’s National Cooperative Highway Research Program. Harry Wen, on behalf of WSU, submitted a proposal for this contract in which UEE was identified as a subcontractor. The proposal noted that Harry Wen did not have any financial interest in UEE; however, the investigation uncovered records that indicated both AER and NTD had both investment and technology ownership interests in UEE.
DOT-OIG is working this investigation jointly with NSF-OIG, IRS-CID, Department of Energy-OIG, Department of Agriculture-OIG, and the FBI.
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.