GenPhar leader convicted of illegal campaign contributions traveling to China before sentencing in bid to keep company afloat
A scientist convicted of making illegal campaign contributions is being allowed to travel to China before his sentencing so he can try to save his embattled Mount Pleasant biotechnology company.
John Dong, GenPhar's president and chief scientific officer, was convicted in March of six federal counts of making illegal campaign contributions. He hasn't been sentenced yet, and also is awaiting trial on federal fraud charges.
First, Dong is heading to his native China, with the court's permission, to try to salvage what's left of the biotechnology company and keep biodefense vaccines alive, according to federal court documents.
In a recent motion, Dong's new attorney, Christopher Adams, said that the three-week trip to Hong Kong in August is critical for the survival of GenPhar.
The only hope for the company to raise the money needed to “keep the lights on” while Dong stands trial is for him to meet with the company's majority shareholder, Pharma Equities, a financial firm that is a subsidiary of a U.S. corporation operating in Hong Kong, the motion stated.
At one point, GenPhar had up to 20 high-level scientists working on research and development, Dong has said. They had effective vaccines against the Ebola and Marburg viruses. The best ones, he claimed.
Vaccine development was halted when the criminal investigation began five years ago, but the material has been kept alive in the Long Point Road facility in a freezer.
The office has a few employees, paid from a loan from a Hong Kong investor group, keeping the vaccines viable, according to the motion.
“If the power is turned off, they would all die,” Dong said during testimony at his trial in March.
That loan is being exhausted, the motion stated. “All the vaccines developed during the past decade with public funding in excess of $10 million will die and be lost forever if they are not properly maintained or if the power or liquid nitrogen supply is turned off for only a few days,” the motion stated.
That's why Dong needs to meet with the board members of the financial firm, to try to get funding to support the maintenance of the vaccines, according to the motion.
Adams argued that Dong is not at risk of running off, despite his former ties to the country. Persecuted as an “intellectual” in communist China, Dong told the jury during his trial that he had been arrested once by Chinese police. Dong said they kicked and beat him, but then released him after six weeks. Shortly after, Dong left China for the United States. He became a U.S. citizen, according to his attorney's motion.
Dong eventually made his way to Charleston, where he began to work at the Medical University of South Carolina. He then founded GenPhar, short for genetic pharmaceuticals.
Assistant U.S. Attorney Mark Moore has argued against the trip, citing a bond violation in 2012 when Dong traveled to Illinois and California without permission from the court.
Dong also lied under oath to a grand jury in 2012 and during the March trial, according to Moore's filing.
A federal judge granted Dong's request on Monday.
Officials with the U.S. Attorney's Office in South Carolina said they could not comment on any aspects of the case, because it remains pending.
Adams, Dong's attorney, would not answer specific questions, but made this statement: “This is a fairly standard request for out-of state-travel when people are presumed innocent or facing trial or waiting to report to the Bureau of Prison. People are allowed to leave for personal reasons and business reasons. It's just that GenPhar's business is global in nature. It's a standard request in keeping with their business.”
Dong's trial is scheduled for November, when he will face other allegations involving GenPhar, in which he is charged with using false claims and bogus paperwork to steal $3.6 million worth of federal grant money that was intended for research on the vaccines for the Ebola and Marburg viruses that GenPhar was developing.
Authorities said he used the money to pay for lobbying and to entertain a mistress in China, among other things.
Reach Natalie Caula at 937-5594 or Twitter.com/ncaula.