Universal Meditech Inc. is actively seeking clearance from the city of Fresno to reopen at a location across the street from Fresno Yosemite International Airport, according to developers.
“There is a broken system of regulation of private labs in the United States. We probably don’t have a way of knowing the full extent of the problem.” — Tania Pacheco-Werner, executive director, Central Valley Health Policy Institute
The south-central Fresno medical manufacturing company — whose 1,000 mice and thousands of gallons of biological material wound up in a Reedley warehouse — only needs approval from the city of Fresno to move in, according to Frank Rodriguez, owner of Style-Line Construction.
Calls made to Mayor Jerry Dyer’s administration were not returned.
Developers finished the 17,000-square-foot warehouse at 3900 N. Blattella Lane earlier this year.
UMI has had an interest in the building for at least a year, Rodriguez said.
Records show UMI fell into dire financial straits and creditors turned to the Reedley warehouse to store the company’s assets. The discoveries made at the Reedley building will play a role in whether UMI can move into the space, Rodriguez said. Based on what Fresno officials told Rodriguez, the company will need state and federal approval.
Universal Meditech seeks to reopen at 3900 N. Blattella Lane near FYI Airport. (GV Wire/Paul Marshall)
Universal Meditech May Reopen Under a Different Name
A lawsuit filed in Fresno County Superior Court by attorney Justin Vecchiarelli of Proper Defense Law, who once represented UMI, said the company had planned to move its business operations near the airport.
Vecchiarelli represented UMI in disputes with the company’s landlord at North Pointe Business Park in south central Fresno. When UMI failed to pay Vecchiarelli, he sued UMI, its officers, and related companies.
“Plaintiff’s investigation has also uncovered that UMI plans on moving its business operations, which, based on information and belief, will be run under a different legal entity, to a new building that is scheduled to be completed in March 2023 that is located at 3900 N. Blattella Lane, Fresno, California 93727,” court documents stated.
A permit filed with the city of Fresno going back to 2022 for 3900 N. Blattella Lane did not have a name associated with it. Rodriguez said the company applied for tenancy as Universal Meditech.
The finished building at 3900 N. Blattella Lane near the Fresno Yosemite International Airport. (GV Wire/David Taub)
Reedley City Manager: Prestige Biotech Did Not Want to Be Seen
As UMI’s “biggest creditor,” Prestige Biotech acquired the assets after the company had fallen into financial difficulties, according to emails from Prestige’s president, Xiuqin Yao, and Reedley code enforcement officer Jesalyn Harper. They needed a location to store the biological materials.
Yao signed a six-month lease for the warehouse space in Reedley as early as October 2022 to store the numerous freezers and 1,000 lab mice while the new space was being built.
Yao even asked Harper if she knew of any space available for the company.
The email chain shows a correspondence between Xiuqin Yao and Reedley code enforcement officer Jesalyn Harper. Yao’s responses to Harper’s questions can be seen in black. Harper responded in red.
Reedley City Manager Nicole Zieba said on GV Wire’s Unfiltered Podcast that because the space was temporary, she thinks Prestige operators did not want the city or the public to know what they were storing.
“Because they never registered with the city, they never pulled a business license or a permit, we have to believe they didn’t want us to know they were there,” Zieba said.
Prestige Biotech Holding Universal Meditech’s Assets After Multi-Million Dollar Judgment
Yao told Harper in an email that Prestige Biotech assumed UMI’s assets after the Fresno company’s capital chain was “broken due to its own business problems.”
UMI not only faced a recall of its COVID-19 test from the Food & Drug Administration, but two companies had secured large settlements against the manufacturer, according to filings with the California Secretary of State.
Louisiana-based Sensiva Health received a $2 million judgment in January and Florida-based Cormeum Lab Services, LLC received a $389,455 judgment in the same case heard in the U.S. District Court Eastern District of California.
GV Wire calls seeking comment from Sensiva were not returned.
Attorney: UMI ‘Juggling’ Assets to Avoid Creditors
During Vecchiarelli’s attempts to be paid by UMI, he reached out to the company’s realtor, Zuohe Song of Zstate Realty, Inc. When talking to Song, court documents report that Song replied to Vecchiarelli, “Why are you looking for them? Do they owe you money, too?”
Song said that UMI used to be his client but because of lawsuits, he could not comment on anything.
Vecchiarelli’s extensive investigation alleged that UMI was “engaged in a sophisticated and organized scheme to hide, move, and conceal UMI and Wang’s assets so that creditors, such as Plaintiff, could not obtain them.”
Xiaoxiao Wang is listed as UMI’s current CEO.
It took Harper, the Reedley code enforcement officer, finding an unauthorized garden hose protruding from the Reedley warehouse to discover UMI’s assets.
Vecchiarelli alleged UMI had transferred its equipment, inventory, assets, and operations to a Walnut Creek company named Furu Arts. Furu Arts is listed as an importing/exporting business. Former UMI CEO Zhaolin Wang is listed as a director with Furu Arts.
“Universal Meditech ‘engaged in a sophisticated and organized scheme to hide, move, and conceal UMI and Wang’s assets so that creditors…could not obtain them.” — Statement of attorney Justin Vecchiarelli in court filings
Yao said UMI had entered bankruptcy, but no filings have been found by GV Wire. Harper asked for a detailed list of what was at the Reedley lab, saying if UMI had filed for bankruptcy and sent their assets to Prestige, an itemized list should be included. Bankruptcy filings for the most part are public records and accessible.
Soon after those emails, communications between Prestige and Reedley officials ended.
“That was one of the frustrating elements in all of this,” said Reedley City Manager Nicole Zieba. “And that led us to believe that we needed to investigate further.”
Jesalyn Harper, life safety code officer with the Reedley Fire Department, points to the hose that started the investigation into the now-shuttered clandestine medical lab, Monday, July 31, 20023. (GV Wire/Paul Marshall)
Landlord Dispute Cited as a Reason for Shutdown
Disputes between Universal Meditech and its landlord at North Pointe Business Park in south central Fresno contributed to why the biological materials and mice had to go to Reedley.
“After UMI had no money to support the company’s continued operation and had a bad relationship with the original landlord, all the creditors had to scramble to find a temporary warehouse where we could store all of UMI’s goods and technical assets,” Yao wrote in the email. Yao said the “price and place” of the Reedley warehouse was suitable.
A source told GV Wire that Universal Meditech had poorly maintained the building at Northe Pointe. A spokesperson for Fresno Fire Department said an August 2020 fire originated from a warehouse there. A manager for UMI told KSEE 24 at the time that the fire’s original was probably “electrical.”
A spokesperson for the Fresno Fire Department said no cause had been reported, but that having no cause is not “atypical.” The spokesperson said because of the news coming out, a report of the fire would not be made available without a public records request. Once that report is secured, GV Wire will disclose the information.
Yao: Prestige Biotech Took Over Universal Meditech Operations
As the largest creditor to Universal Meditech, Yao said Prestige had taken over the company’s assets, including monoclonal antibodies and more than 1,000 mice Universal Meditech had been “cultivating” for more than six years. Yao valued the mice to be as much as $1 million because of the rarity and the time it took to get the mice to lab levels.
“These mice are very precious,” Yao said in an email. “They are a special purebred population that took six years to build up. It is of special significance in the study of immunology and oncology. The value of its biological assets is likely to be hundreds of thousands or even one million (dollars).”
Yao was in the midst of applying for a visa to come to the U.S., according to a March email, but the line for visas at the U.S. Embassy in Beijing “increased sharply.”
In emails, Yao insisted the mice needed to be cared for because of their value to creditors.
$1 Million in Mice ‘Inhumanely Kept’
Despite being valued at almost $1 million, said Dr. Nina Hahn, the mice were kept “far outside all animal welfare regulations and standard of care.” Hahn is an attending veterinarian at the Lawrence Berkeley National Laboratory.
“Non-compliant findings include cages overcrowded, improper sanitation, exposure to wild rodents, lights on 24 hours (mice are nocturnal need dark to sleep), no PPE for husbandry staff, no water source for washing, no appropriate place to dump soiled bedding, no evidense (sic) of routine daily checks,” Hahn wrote in an email.
Dead mice were being disposed of in the garbage, according to Reedley City Manager Nicole Zieba.
Throughout March, Harper pressed Yao on what the company was doing to take care of the mice and to clarify what licensing they had to store the thousands of gallons of biological materials at the warehouse. Because code enforcement had shut off access to the building, care of the mice had to be coordinated.
But Harper said repeatedly that questions posed to Yao weren’t being answered adequately.
“There are regulations and standards for keeping mice,” Harper said in an email. “You are not meeting these standards at a state or local level. You have yet to provide us with the (Universal Meditech Inc.) procedures that would outline your care plan for these mice. I need you to send me the UMI procedures.”
Health Officials: State, Federal Medical Lab Licensing Process Needs Reform
The California Department of Public Health has not responded to numerous requests to find out more about the licensing process for medical labs. On the Unfiltered podcast, Zieba, Fresno County Supervisor Buddy Mendes, and Joe Prado, assistant director of the Fresno County Department of Public Health, all said reform needs to be made to the medical lab licensing system.
The thread
nobody asked for about the policy implications of the #Reedleylab situation. First, let’s start by acknowledging 1) there is a broken system of regulation of private labs in the United States & 2) we probably don’t have a way of knowing the full extent of the problem
— Tania Pacheco-Werner (@taniahlthplce) August 2, 2023
Shutting down active labs by the Centers for Disease Control or the Food & Drug Administration requires compiling violations, notices, and voluntary recalls according to a Tweet by Tania Pacheco-Werner, the executive director of the Central Valley Health Policy Institute. There is no state or federal legislation that gives agencies enough power to shut down medical labs.
“There is a broken system of regulation of private labs in the United States,” Pacheco-Werner tweeted. “We probably don’t have a way of knowing the full extent of the problem.”
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