Crime & Safety

GenPhar President Faces Fraud Charges

Authorities allege John Dong embezzled $4 million in grants meant for vaccine research.

The president of GenPhar, a Mount Pleasant-based pharmaceutical developer, faces a slew of federal indictments that allege he used millions of dollars in federal grant money on improper expenses.

The multi-count indictment, unsealed Monday, alleges Jian-Yun “John” Dong submitted false claims to federal agencies to receive grant money for research, but instead he used the money for personal expenses, according to a news release from U.S. Attorney Bill Nettles.

Dong was, until last summer, building a massive headquarters in Oakland Plantation where was to develop vaccines for dengue fever, Ebola virus, Marburg virus, and HIV for the U.S. military and the federal government.

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But authorities allege Dong was instead using the money for construction costs and travel expenses. Those costs were not to be covered by the federal grants, according to the indictment.

Dong also is accused of ordering employees to falsify time sheets so that he could trigger payments from the federal government for fictitious research.

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A slew of federal agencies, including the FBI, the Department of Health and Human Services and five military criminal investigative agencies conducted the investigation, according the U.S. Attorney’s news release.

Work at the GenPhar facility in Mount Pleasant came to a standstill and its 15 employees were laid off in June 2010, according the Post and Courier. At the time, Dong blamed the town for the construction slowdown.

But it appears that may have been when federal authorities got wise to his alleged scam. He received a final $75,000 payment from the government on June 29, 2010, according to the indictment.

Dong, 54, and his estranged wife, Danher Wang, 52, face a separate indictment for a scheme to donate more than $30,000 in illegal contributions to the re-election campaign of U.S. Sen. Lindsey Graham and the conservative political action committee Fund for America’s Future.

For the 36-count fraud indictment, Dong faces up to 30 years in prison for each charge, with a $250,000 fine for each count. Authorities are seeking a return of the roughly $4 million grant funds as well as the massive building and Dong’s home in the swanky Charleston National development and a separate residence on Lake Moultrie.

In the separate seven-count election fraud indictment, both Dong and Wang  face maximum sentences of five years imprisonment and a $250,000 fine for each count of campaign finance fraud. And Dong faces an additional maximum sentence of 20 years for witness tampering charges.


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