Investigation on Reedley building uncovers bio, health hazards

A code enforcement checkup leads to the discovery of an illegal lab, COVID-19 and pregnancy test kits, infectious agents and upwards of 1,000 white mice at 850 I Street

Shot from sidewalk outside of south gate, where showroom can be accessed. (Kenny Goodman)
Shot from sidewalk outside of south gate, where showroom can be accessed. (Kenny Goodman)
Darren Fraser
Published July 25, 2023  • 
9:00 am

REEDLEY – When Reedley code enforcement officers investigated a warehouse at 850 I Street on March 3 over an illegally attached garden hose, they had no idea what massive medical violations they would go on to uncover. 

“It was pretty clear right off the bat that something was going on we didn’t have a business license for,” Reedley City Manager Nicole Zieba said. “They didn’t have any city approvals; that building was supposed to be vacant.”

Zieba said the officers left the property because they did not have a warrant. The suspicious garden hose coupled with numerous building code violations led officers to declare the site unsafe. The city posted “Unsafe to Occupy” signs around the property and ordered individuals on site to leave. They then called the Fresno County Department of Public Health (FCDPH).

 

MULTI-AGENCY PARTICIPATION

 

That phone call launched an investigation that would eventually involve the Centers for Disease Control and Prevention (CDC), the FBI, the State Department of Toxic Substances Control (DTSC), the State Department of Health, the California Department of Public Health (CDPH) and FCDPH, and would lead to the discovery of a lab that had been operating illegally in the city since October 2022. For FCDPH Director David Luchini and FCDPH Assistant Director Joe Prado, the amount of biological materials and chemicals – over 800 – found at the lab was a first.

“I’ve been with the department for 30 years and I don’t recall a similar situation,” Luchini said.

 Prado also echoed similar sentiments.

“Twenty-six years with the county of Fresno, and I have never come across this situation nor have I heard any of my counterparts deal with a situation like this,” Prado said.

AY-NC, LP owns the property at 850 I Street. Alliance, Inc. leased part of the property for its granite countertops sales location. Alliance has since gone out of business. According to multiple documents filed in Fresno Superior Court, in early fall of 2022, Nevada-based Prestige Biotech, Inc. moved equipment into the warehouse at 850 I Street and established a lab. Court documents state that Prestige was operating a lab in Fresno in 2022 but it was destroyed in a fire, which prompted the move to Reedley.

Reedley officials and personnel from CDPH and FCDPH executed a warrant on March 16 to inspect the warehouse at 850 I Street. According to a declaration from Humero Prado, Assistant Director of Fresno County Public Health, which was filed in superior court, investigators discovered that one room of the warehouse was used to produce COVID-19 and pregnancy tests. In other rooms, investigators found blood, tissue and other bodily fluid samples. They also found thousands of vials that contained unlabeled fluids. 

 

OF BIOENGINEERED MICE AND INFECTIOUS AGENTS

 

“That’s when we found the mice,” said Zieba.

Over 900 mice were located at the facility. Court documents identify Wang Zhaolin as the Prestige representative onsite during the investigation. Zhaolin informed the investigators that “these mice were genetically engineered to catch and carry the COVID-19 virus.” Court documents describe the conditions under which the mice were housed as “inhumane.”

Under the auspices of an abatement order, Reedley officials conducted a follow-up investigation to 850 I Street on April 12. As a result of this investigation, and on the advice of a veterinarian who accompanied investigators, the decision was made to euthanize 773 mice. Investigators also discovered 178 dead mice on the property.

Court documents confirm Prestige never contracted with a licensed medical waste hauler to dispose of medical wastes – including the mice – per state regulations; which means from October 2022 until the lab was shuttered, Prestige was illegally disposing of medical wastes generated by the lab.

From May 2 through May 4, the CDC’s Division of Select Agents and Toxins inspected 850 I Street. Court documents confirm the CDC found potentially infectious agents at the location. These included both bacterial and viral agents, including: chlamydia, E. Coli, streptococcus pneumonia, hepatitis B and C, herpes 1 and 5 and rubella. The CDC also found samples of malaria.

 

WHO IS PRESTIGE BIOTECH?

 

While these investigations were being conducted, Reedley officials and FCDPH repeatedly made attempts to speak to representatives from Prestige. Court documents identify Xiuquin Yao as the alleged president of Prestige. Neither Reedley nor FCDPH was able to obtain from Yao any substantive information regarding Prestige or why infectious agents and mice were being stored at 850 I Street other than to say that the company was developing diagnostic testing kits.

Court documents describe Prestige as the successor to Universal Meditech, Inc., a now-bankrupt medical equipment manufacturer located in Fresno. When Universal filed for bankruptcy, Prestige was its largest creditor. It is not clear if Prestige assumed Universal’s liabilities and took over its operation.

Court documents include copies of an email exchange Prado conducted with David He, who identified himself as a representative of Prestige, beginning May 31 and continuing through June 13. Over the course of numerous emails, Prado repeatedly asks He to provide documentation regarding licensed medical waste disposal, Prestige’s reasons for storing infectious agents and how the company will respond to the biological abatement orders handed down by FCDPH.

“They (Prestige) completely avoided the questions,” Prado said. “This individual (He) was either unaware or was intentionally trying to mislead us.”

In what can best be described as a shell game, He initially discounted the veracity of the reports that Prestige was storing infectious agents at 850 I Street. Over the course of the email exchange, He asked for a list of the agents, which Prado submitted each time He requested it. He continued to press Prado to contact Dimensions, a company He claimed was a licensed medical waste hauler. Prado requested documentation that Dimensions was licensed; He abjured. 

As of this writing, no one from Prestige has taken responsibility for the contents of the lab.

“No one has come forward from these companies (Prestige, UMI) to say they own these chemicals and biologicals,” Luchini said.

 

WHERE WAS THE OVERSIGHT?

 

Prestige operated an unlicensed lab in Reedley from October 2022 to March 3 of this year Fresno Superior Court documents confirm the lab housed dangerous infectious agents. There were over 30 freezers and refrigeration units that stored thousands of bodily fluids, serums, tissues and other medical items. Lab mice were subjected to experiments involving the COVID-19 virus. Mice were discovered to be living in inhumane conditions, which resulted in nearly 200 dead mice discovered by investigators. And since the lab did not use a licensed medical waste hauler, whatever medical wastes were onsite and which were disposed of were disposed of illegally.

“There were some statements by individuals who were going into the facility and dump it (waste) into their waste bin,” Prado said. “After that, it would go to the landfill.” 

Zieba acknowledged that when companies do not play by the rules, as Prestige did when it moved its equipment into 850 I Street, cities are at a disadvantage. 

“It’s not necessarily illegal for labs to have these substances if they’re licensed,” Zieba said. Prestige was not licensed.

“Locally, if you have biologics, you’re not required to notify us,” Luchini said. 

Prado added there is no requirement for any lab, licensed or not, to report to the local public health department the biologicals or the testing the lab is conducting. 

“If you don’t receive public funding of any sort, you can, with private dollars, set up a laboratory in California, in the United States,” Prado said.

Zieba said when Reedley officials discovered the presence of the lab, the city immediately reached out to its partners to intervene. 

“It happens behind closed doors, under the cover of night,” said Zieba. “These folks did not come into city hall to get a permit.” 

Zieba said as of this writing, all biologicals have been removed from 850 I Street. What remains on the site are empty freezers and refrigeration units, furniture, packaging and other office items.

Darren Fraser
Reporter