499 F.Supp.3d 940
D. Kan.2020Background
- Defendant Feng “Franklin” Tao, a University of Kansas (KU) professor, applied to and was accepted into China’s Chang Jiang Scholar program and later signed a five‑year contract with Fuzhou University (FZU); he continued to hold KU employment and apply for U.S. government (USG) research funding.
- KU and the Kansas Board of Regents (KBOR) required faculty to disclose current or prospective conflicts of interest/time via an Institutional Responsibilities (Conflict) form and to secure approval before outside employment.
- The Second Superseding Indictment (SSI) alleges Tao falsified Conflict forms and communications to DOE/NSF to conceal his FZU affiliation and foreign funding, charging seven counts of wire fraud (18 U.S.C. § 1343) and three counts of making false statements (18 U.S.C. § 1001).
- Tao moved to dismiss the SSI for failure to state an offense, lack of venue as to Count 10, and for alleged prosecutorial misconduct before the grand jury; amici sought leave to file briefs on racial/prosecutorial-bias concerns.
- The court confined its Rule 12 review to the four corners of the SSI (declining to consider the Conflict form exhibits for the motion to dismiss for failure to state an offense), denied Tao’s dismissal motions, and granted amici leave to file their brief in part.
Issues
| Issue | Government's Argument | Tao's Argument | Held |
|---|---|---|---|
| 1) Whether the SSI pleads a money-or-property scheme to support wire fraud | SSI alleges object of scheme was deprivation of KU and USG money (grant funds and salary) via false certifications and concealment | Nondisclosure of conflicts is not property fraud; right to accurate info is not property; mere maintenance of salary not deprivation | Denied dismissal — allegations sufficiently plead money/property fraud as object of scheme (Kelly distinguished; factual sufficiency for trial) |
| 2) Falsity of Conflict forms and DOE communications | Allegations claim affirmative misrepresentations (e.g., representations that funding would be US‑only; certifications of no conflicts) | Statements were literally true or at most incomplete; no reportable conflicts at time of some forms | Denied — falsity adequately alleged on SSI; literal‑truth defense presents evidentiary issues for trial |
| 3) Jurisdiction for §1001 counts (Counts 8–9) | NSF/DOE have authority over grant funding; KU used disclosures to comply with federal requirements — §1001 jurisdiction broadly satisfied | Conflict forms are KU HR matters, peripheral to federal agencies; no statutory basis for federal jurisdiction | Denied — SSI alleges sufficient nexus (funding relationship and agency authority) to satisfy §1001 jurisdiction standard |
| 4) Venue for Count 10 (July 16, 2018 DOE statement) | SSI alleges the statement was made from outside U.S.; venue proper under 28 U.S.C. § 3238 (place of arrest) or via transmission through Kansas | Statement not made in District of Kansas; indictment failed to incorporate venue‑supporting paragraph | Denied — face of SSI sufficiently alleges extraterritorial transmission and arrest in Kansas; venue proper |
| 5) Due process / vagueness / rule of lenity | Wire fraud and §1001 as charged give fair warning; allegations plead intent and willfulness | Statutes vague as applied; prosecution risks arbitrary/ethnic targeting of China‑linked researchers; lenity applies | Denied — statutes not vague as applied; prosecutorial concerns go to policy or evidentiary proof, not notice |
| 6) Grand jury misconduct (false/misleading testimony; prejudicial prosecutor remarks) | Government had good‑faith basis for agent testimony; disputed facts are for trial; remarks did not unduly influence grand jury | Case agent misstated Conflict form scope and buyout approval; prosecutor implied counterintelligence/espionage | Denied — defendant failed to show deliberate presentation of false testimony or that misconduct substantially influenced grand jury indictment |
Key Cases Cited
- Kelly v. United States, 140 S. Ct. 1565 (2020) (clarifies property‑object requirement and that incidental losses cannot alone support property‑fraud convictions)
- Skilling v. United States, 561 U.S. 358 (2010) (limits honest‑services fraud; used to distinguish theory here)
- United States v. Zar, 790 F.3d 1036 (10th Cir.) (elements of wire fraud)
- United States v. Redcorn, 528 F.3d 727 (10th Cir.) (wire transmission must be incident to accomplishment of essential part of scheme)
- United States v. Weiss, 630 F.3d 1263 (10th Cir.) (scheme definition and scope of acts in furtherance)
- United States v. Wright, 988 F.2d 1036 (10th Cir.) (broad §1001 jurisdiction analysis where federal funds/authority implicated)
- United States v. Rodgers, 466 U.S. 475 (1984) (jurisdiction in §1001 should not be given narrow meaning)
- United States v. Cabrales, 524 U.S. 1 (1998) (venue must be proper as to each count)
- Bank of Nova Scotia v. United States, 487 U.S. 250 (1988) (standard for dismissing indictment for prejudicial grand jury errors)
- United States v. Richter, 796 F.3d 1173 (10th Cir.) (rule of lenity and statutory interpretation principles applied in fraud context)