Southern Illinois Professor Indicted for Grant Fraud

CARBONDALE,  Ill.  –  A  mathematics  professor  and  researcher  at  Southern  Illinois
University  – Carbondale (SIUC) is  under federal indictment for grant fraud. Mingqing  Xiao,  59,
of  Makanda, Illinois,  is  accused  of  fraudulently  obtaining  $151,099  in  federal  grant
money  from  the  National Science  Foundation  (NSF)  by  concealing  support  he  was  receiving
from  an  arm  of  the  Chinese government and a Chinese public university. Xiao is charged with
two counts of wire fraud and one count of making a false statement.
The prosecution is part of the Justice Department’s ongoing China Initiative. Led by the
Department’s National Security Division (NSD), the China Initiative is an effort to safeguard
American intellectual property and research programs and counter the multi-faceted threat posed by
the PRC government to U.S. national security.

While  the  Chinese  government  maintains  ambitious  strategic  goals  to  dominate  certain
global economic sectors, its ability to achieve those goals is hampered by its lack of domestic
innovation. Comments made by Chinese Premier Li Keqiang at a Communist Party gathering in March
2019 underscore this dilemma: “Our capacity for innovation is not strong and our weakness in terms
of core technologies for key fields remains a salient problem.”¹  Given this identified weakness,
China resorts to various forms of economic aggression to achieve its strategic goals, including
hacking, theft, espionage, and recruiting “non-traditional collectors” in academia to acquire U.S.
technologies and intellectual property. The China Initiative works with academia and private
industry to combat the PRC government’s diverse counterintelligence threats.

“Again,  an  American  professor  stands  accused  of  enabling  the  Chinese  government’s
efforts  to corruptly benefit from U.S. research funding by lying about his obligations to, and
support from, an arm of the Chinese government and a Chinese public university,” said John C.
Demers, Assistant Attorney General for National Security. “Honesty and transparency about funding
sources lie at the heart of the scientific research enterprise. They enable U.S. agencies to
distribute scarce grants for scientific  research  fairly  and  equitably.  And  they  allow  other
researchers  to  evaluate  potential conflicts of interest and conflicts of commitment. When
researchers fall short of fulfilling these core academic  values  in  ways  that  violate  the
law,  the  Department  stands  ready  to  investigate  and prosecute.”
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Source: http://www.china.org.cn/china/NPC_CPPCC_2019/2019-03/16/content_74578930.htm

“We know that China exploits American universities to further the aims of the Chinese Communist
Party,”  said  U.S.  Attorney  Steven  D.  Weinhoeft.  “That’s  one  reason  why  the  National
Science Foundation requires applicants to disclose all sources of support, including foreign ties,
as a condition to receive federal grant funding. Prosecutions like this one play a critical role,
not just in protecting American  investments  in  academic  research  from  foreign  exploitation,
but  also  in  combating  the growing threat that China poses to our national security.”
“The  FBI  takes  seriously  its  commitment  to  work  with  our  partners  in  academia  to
protect  U.S. research  funded  grants,”  said  Sean  M.  Cox,  FBI-Springfield’s  Special  Agent
in  Charge.  “This investigation, like so many others, should serve as a reminder that failure to
be truthful and transparent on an application for U.S. funded grants is a violation of the law. In
this case the applicant allegedly failed to disclose his affiliation with China. Individuals who
fail to disclose their affiliation with any foreign nation will be held accountable.”

According  to  the  indictment,  Xiao  has  worked  in  SIUC’s  mathematics  department  since
2000, focusing his research on partial differential equations, control theory, optimization theory,
dynamical systems, and computational science. In that position, Xiao (who is an American citizen)
allegedly applied for and received NSF grant funds for a project set to run from 2019 to 2022
without informing NSF about another, overlapping grant he had already received from the Natural
Science Foundation of Guangdong Province, China. Xiao also allegedly failed to inform NSF that he
was on the payroll of  Shenzhen  University,  a  public  university  in  Guangdong  Province,  and
that  he  had  already committed to teaching and conducting research at Shenzhen University from
2018 to 2023.

The indictment further alleges that in March 2019, while his NSF grant proposal was still pending,
Xiao submitted another grant proposal to the Natural Science Foundation of China. According to the
indictment, Xiao allegedly applied for the funds as an employee of Shenzhen University and did not
disclose the new Chinese proposal to NSF. Xiao is charged with falsely certifying to SIUC that his
NSF grant proposal was true, complete, and accurate.

Before  awarding  the  grant,  NSF  questioned  Xiao  about  any  current  or  pending  funding
from “worldwide sources,” including specifically whether he held any position outside the United
States or had obtained funding from any non-US funding sources. The indictment accuses Xiao of
falsely reporting to NSF that he had nothing else to disclose.

The  defendant’s  initial  court  appearance  has  not  yet  been  scheduled.  If  convicted,  Xiao
faces  a maximum penalty of 20 years in prison on each count of wire fraud and 5 years in prison
for making a false statement. All three charges are also punishable by a fine of up to $250,000. A
federal district court judge will determine any sentence after considering the U.S. Sentencing
Guidelines and other statutory factors.

FBI-Springfield,  the  IRS,  and  the  Department  of  Homeland  Security  are  investigating  the
case. Assistant  U.S.  Attorney  Peter  T.  Reed  is  prosecuting  the  case,  with  assistance
from  NSD’s Counterintelligence & Export Section.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty
beyond a reasonable doubt in a court of law.

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