GenPhar CEO claims persecution

GenPhar CEO Jian-Yun 'John' Dong

MOUNT PLEASANT -- The embattled head of GenPhar said federal authorities are sacrificing jobs and America's safety to persecute him for harmless errors and book-keeping issues at his disease- fighting firm.

Dr. Jian-Yun Dong, GenPhar's president and chief executive officer, on Tuesday said allegations that he fleeced the government for $3.6 million are lies concocted to justify a lengthy federal investigation. He insisted he has done nothing wrong and never pocketed any of the $19.6 million in grant money GenPhar received over the years.

"Everything they are saying is false. They are just trying to bully their way out of this," Dong said. "This was all completely for the best interests of our nation, the state of South Carolina and for creating jobs."

Dong said the government's actions have effectively hobbled his company, stalling plans to create some 300 jobs in the Lowcountry and sidelining vaccines that could someday save American troops and the nation from terror attacks.

Assistant U.S. Attorney Beth Drake referred comment on Dong's assertions to Bill Nettles, U.S. attorney for South Carolina. Nettles, however, could not be reached late Tuesday.

Dong, 54, is accused of using false claims and bogus paperwork to divert money intended for research on vaccines for the deadly Ebola and Marburg viruses. The indictment alleges that he used that money to pay for lobbying, construction on GenPhar's new $33 million headquarters and other unallowed expenses.

Dong and his estranged wife, 52-year-old scientist Danher Wang, also are accused in a separate, seven-count indictment of conspiring to make at least $31,000 in illegal campaign contributions to U.S. Sen. Lindsey Graham and his political action committee, Fund for America's Future. Dong faces a witness-tampering charge in that case as well.

Dong, who faces the potential of more than 100 years in prison and millions of dollars in fines, is free on $50,000 bail while he awaits trial. A judge has barred him from contacting his company's workers -- including his wife -- and shareholders while free.

In addition, the Medical University of South Carolina, where Dong has worked since 1998, placed him on paid administrative leave following his indictment. Dong is a professor of basic science at MUSC, drawing an annual salary of $105,313, state records show.

Heather Woolwine, MUSC's media relations director, said Dong, who is in his final year at the school, will remain sidelined until the criminal charges are resolved.

Woolwine said none of the allegations concern Dong's work at MUSC and the university has no affiliation with GenPhar. Still, the university plans to review Dong's handling of federal grants he was involved with at MUSC to ensure the school is in compliance with regulations, she said. She could not immediately provide a dollar amount on those grants.

Dong said he hauled in at least $8.8 million for the school and handled those funds properly.

Dong said his current problems stem from a disagreement with a contractor who wrongly told federal investigators GenPhar was using fraudulent technology. That resulted in an FBI raid a few years back in which armed agents "interrogated" employees and shareholders, he said.

Dong said investigators found nothing illegal but continued to hunt for problems that didn't exist. In the end, they indicted him for paperwork and book-keeping issues that could have easily been resolved, he said. His travel, for example, involved international trips to promote GenPhar's vaccine technology and learn from others, he said.

Dong, a native of China, blamed the campaign finance violations on his unfamiliarity with this country's election laws. He said he became a U.S. citizen several years ago and was just trying to support a candidate he believed in. "It was an honest mistake," he said.

Dong is accused of persuading a German shareholder in GenPhar to transfer $36,000 from a Frankfurt bank account in three payments to him, his wife and a company worker. The couple then recruited conduits, including their minor daughter, family members and other GenPhar employees, to donate that money to Graham in their names, the indictment states.

Graham's aides and prosecutors have indicated the senator was unaware at the time of any problems with the contributions. Campaign officials met with federal authorities in 2010 and provided information pertinent to the probe.

Dong said the $36,000 was compensation for work he performed for GenPhar and had nothing to do with a plot to sidestep election laws. "I simply don't understand why a small section of the government is behaving like this," he said.

Reach Glenn Smith at 937-5556 or on Twitter at @glennsmith5.