Company Tied To Illegal Reedley Lab Tries To Reopen Near Fresno Airport – GV Wire

Universal Meditech Inc. is actively seeking permission from the city of Fresno to reopen at a location across the street from Fresno Yosemite International Airport, according to developers.

“There is a broken system for regulating private labs in the United States. We probably have no way of knowing the full extent of the problem.” — Tania Pacheco-Werner, Executive Director, Central Valley Health Policy Institute

The south-central Fresno medical manufacturing company — whose 1,000 mice and thousands of gallons of biological material are entangled in a Reedley warehouse — only needs approval from the city of Fresno to move in, according to Frank Rodriguez, owner of Style-Line Construction.

Calls to Mayor Jerry Dyer’s administration were not returned.

Developers completed the 17,000-square-foot warehouse at 3900 N. Blattella Lane earlier this year.

UMI has had an interest in the building for at least a year, Rodriguez said.

Records show that UMI fell into serious financial trouble and creditors turned to the Reedley warehouse to store the company’s assets. The discoveries in the Reedley building will play a role in whether UMI can move into space, Rodriguez said. Based on what Fresno officials told Rodriguez, the business will need state and federal approval.

Universal Meditech may reopen under a different name

A lawsuit filed in Fresno County Superior Court by attorney Justin Vecchiarelli of Proper Defense Law, who once represented UMI, said the company had planned to relocate its business operations near the airport.

Vecchiarelli represented UMI in disputes with the company’s landlord at North Pointe Business Park in south-central Fresno. When UMI failed to pay Vecchiarelli, he sued UMI, its officers and related companies.

“The complainant’s investigation has also revealed that UMI plans to relocate its business operations, which based on information and belief will be conducted under a different legal entity, to a new building scheduled for completion in March 2023, located at 3900 N. Blattella Lane, Fresno, California 93727,” court documents state.

A permit filed with the city of Fresno that dates back to 2022 for 3900 N. Blattella Lane did not have a name attached. Rodriguez said the company applied for the lease as Universal Meditech.

Reedley City Manager: Prestige Biotech did not want to be seen

As UMI’s “largest creditor,” Prestige Biotech acquired the assets after the company fell into financial difficulties, according to emails from Prestige’s president, Xiuqin Yao, and Reedley’s chief enforcement officer, Jesalyn Harper. They needed a place to store the biological materials.

Yao signed a six-month lease for the warehouse space in Reedley as early as October 2022 to store the numerous freezers and 1,000 lab mice while the new space was built.

Yao even asked Harper if she knew of any vacancies for the company.

Reedley City Manager Nicole Zieba said on GV Wire’s Unfiltered Podcast that because the space was temporary, she believes Prestige operators didn’t want the city or the public to know what they were storing.

“Because they never registered with the city, they never pulled a business license or a permit, we have to believe they didn’t want us to know they were there,” Zieba said.

Prestige Biotech Holding Universal Meditech’s assets after multi-million dollar judgment

Yao told Harper in an email that Prestige Biotech took over UMI’s assets after the Fresno company’s capital chain was “broken due to its own business problems.”

Not only did UMI face a recall of its COVID-19 test by the Food & Drug Administration, but two companies had secured large settlements against the manufacturer, according to filings with the California Secretary of State.

Louisiana-based Sensiva Health received a $2 million judgment in January and Florida-based Cormeum Lab Services, LLC received a $389,455 judgment in the same case heard in the U.S. District Court Eastern District of California.

GV Wire calls seeking comment from Sensiva were not returned.

Related Story: FDA Recalls COVID-19 Tests From Fresno Lab Linked to Illegal Reedley Facility

Lawyer: UMI ‘juggling’ assets to avoid creditors

During Vecchiarelli’s attempt to get paid by UMI, he contacted the company’s realtor, Zuohe Song of Zstate Realty, Inc. When he spoke to Song, court documents report Song replied to Vecchiarelli, “Why are you looking for them? Do they owe you money too?”

Song said UMI used to be his client, but due to litigation, he could not comment.

Vecchiarelli’s extensive investigation alleged that UMI was “engaged in a sophisticated and organized scheme to hide, move and conceal UMI and Wang’s assets so that creditors, such as Plaintiff, could not obtain them.”

Xiaoxiao Wang is listed as UMI’s current CEO.

It took Harper, the Reedley code enforcer, finding an unauthorized garden hose protruding from the Reedley warehouse to discover UMI’s assets.

Vecchiarelli alleged that UMI had transferred its equipment, fixtures, assets and operations to a Walnut Creek company named Furu Arts. Furu Arts is listed as an import/export company. Former UMI CEO Zhaolin Wang is listed as a director at Furu Arts.

“Universal Meditech ‘engaged in a sophisticated and organized scheme to hide, move and conceal UMI and Wang’s assets so that creditors … could not obtain them.’ — Statement by attorney Justin Vecchiarelli in litigation

Yao said UMI had gone bankrupt, but no filings have been found by GV Wire. Harper asked for a detailed list of what was at the Reedley lab, saying that if UMI had filed for bankruptcy and sent their assets to Prestige, an itemized list should be included. Bankruptcy filings are mostly public records and available.

Shortly after these emails, communication between Prestige and Reedley officials ended.

“That was one of the frustrating elements of all of this,” Reedley City Manager Nicole Zieba said. “And that made us think we needed to investigate further.”

Related Story: Video by the Clandestine Biological Laboratory in Reedley, CA

Landlord dispute cited as reason for shutdown

Disputes between Universal Meditech and its landlord at North Pointe Business Park in south-central Fresno contributed to why the biologics and mice had to go to Reedley.

“After UMI had no money to support the company’s continued operations and had a bad relationship with the original landlord, all creditors had to scramble to find a temporary warehouse where we could store all of UMI’s goods and technical assets,” Yao wrote in e-mail. Yao said the “price and location” of the Reedley warehouse was appropriate.

A source told GV Wire that Universal Meditech had poorly maintained the building at Northe Pointe. A Fresno Fire Department spokesman said an August 2020 fire originated in a warehouse there. A manager for UMI told KSEE 24 at the time that the fire’s original was probably “electrical.”

A spokesman for the Fresno Fire Department said no cause had been reported, but that it is not “atypical to have no cause.” The spokesman said because of the news coming out, a report on the fire would not be made available without a public records request. Once this report is secured, GV Wire will pass on the information.

Yao: Prestige Biotech took over Universal Meditech Operations

As the largest creditor of Universal Meditech, Yao said Prestige had taken over the company’s assets, including monoclonal antibodies and more than 1,000 mice that Universal Meditech had been “cultivating” for more than six years. Yao valued the mice to be as much as $1 million because of the rarity and the time it took to get the mice to laboratory levels.

“These mice are very precious,” Yao said in an email. “They are a particularly pure-bred population, which took six years to build up. It is of particular importance in the study of immunology and oncology. The value of its biological assets is likely to be hundreds of thousands or even a million (dollars).

Yao was in the process of applying for a visa to come to the U.S., according to a March email, but the line for visas at the U.S. Embassy in Beijing “surged.”

In emails, Yao insisted that the mice should be cared for because of their value to creditors.

$1 Million in Mice ‘Inhumanely Kept’

Despite being valued at nearly $1 million, Dr. Nina Hahn, the mice were kept “far beyond all animal welfare regulations and standards of care.” Hahn is a asupervising veterinarian at Lawrence Berkeley National Laboratory.

“Non-compliant findings include overcrowded cages, improper sanitation, exposure to wild rodents, lights on 24 hours (mice are nocturnal needing darkness to sleep), no PPE for housekeeping staff, no water source for washing, no proper place to dump soiled bedding , no evidence (sic) of routine daily checks,” Hahn wrote in an email.

Dead mice were disposed of in the trash, according to Reedley City Manager Nicole Zieba.

Throughout March, Harper pressed Yao on what the company was doing to take care of the mice and to clarify what license they had to store the thousands of gallons of biological material in the warehouse. Because code enforcement had closed off access to the building, care for the mice had to be coordinated.

But Harper repeatedly said questions posed to Yao were not adequately answered.

“There are rules and standards for keeping mice,” Harper said in an email. “You do not meet these state or local standards. You have not yet provided us (Universal Meditech Inc.) with the procedures that will outline your care plan for these mice. I need you to send me the UMI procedures.”

Health Officials: State, Federal Medical Lab Licensing Process Needs Reform

The California Department of Public Health has not responded to numerous requests to learn more about the licensing process for medical laboratories. On the unfiltered podcast, Zieba, Fresno County Supervisor Buddy Mendes and Joe Prado, assistant director of the Fresno County Department of Public Health, all said reform of the medical laboratory licensing system needs to be done.

The thread no one asked about the political consequences of #Reedleylab situation. First, let’s start by acknowledging 1) there is a broken system for regulating private labs in the US & 2) we likely have no way of knowing the full extent of the problem

— Tania Pacheco-Werner (@taniahlthplce) 2 August 2023

Shutdowns of active laboratories by the Centers for Disease Control or the Food & Drug Administration require the compilation of violations, notices and voluntary recalls, according to a tweet by Tania Pacheco-Werner, the executive director of the Central Valley Health Policy Institute. There is no state or federal law that gives agencies sufficient power to close medical laboratories.

“There is a broken system for regulating private labs in the US,” Pacheco-Werner tweeted. “We probably don’t have a way of knowing the full extent of the problem.”