Husband and Wife Sentenced In Scheme To Defraud The United States

Rochester, NY – Bin “Ben” Wen, 46, and Peng “Jessica” Zhang, 45, both formerly of Horseheads, NY, who were convicted of conspiracy to commit wire fraud and conspiracy to defraud the United States respectively, were sentenced today by U.S. District Judge Elizabeth A. Wolford.

Wen was sentenced to serve 33 months in prison while Zhang was sentenced to five years of probation, to include six months of home detention. The defendants were also ordered to pay $5,500,000 in restitution.

Between June 2010, and December 2015, the defendants participated in a scheme to defraud departments and agencies of the United States of federal research funds that were awarded to companies controlled by the defendants. The government entities defrauded by the defendants included: the National Science Foundation (NSF); the United States Department of Energy (DOE); and the United States Department of Agriculture (USDA).

In December, 2003, Zhang incorporated United Environment & Energy, L.L.C. (UEE) in Horseheads, NY. Meanwhile, Wen incorporated Advanced Technologies and Materials, L.L.C. (ATM), in December, 2007, also in Horseheads. UEE submitted approximately 13 applications to NSF totaling over $2,600,000, 10 applications to the DOE totaling more than $5,000,000 and four applications to the USDA totaling approximately $650,000. The defendant received, through their companies, approximately $8,400,000 in awards from the NSF, the DOE, and the USDA.

Wen and Zhang submitted false and fraudulent information in Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) applications by:

  • fabricating letters of support and investment;
    • providing false information in research grant proposals and reports regarding business entities, business employees, business/research facilities, matching funds and investments; and
    • providing falsified reports and emails regarding how federal research funds were expended.

A substantial amount of the fraudulently obtained money went toward the personal use and benefit of the defendants.