United States Attorney's Office for the Southern District of Illinois

04/22/2021 | Press release | Distributed by Public on 04/22/2021 14:54

Southern Illinois Professor Indicted for Grant Fraud

CARBONDALE, Ill. - A mathematics professor and researcher at Southern Illinois
University - Carbondale (SIUC) is under federal indictment for grant fraud. Mingqing Xiao, 59,
of Makanda, Illinois, is accused of fraudulently obtaining $151,099 in federal grant
money from the National Science Foundation (NSF) by concealing support he was receiving
from an arm of the Chinese government and a Chinese public university. Xiao is charged with
two counts of wire fraud and one count of making a false statement.
The prosecution is part of the Justice Department's ongoing China Initiative. Led by the
Department's National Security Division (NSD), the China Initiative is an effort to safeguard
American intellectual property and research programs and counter the multi-faceted threat posed by
the PRC government to U.S. national security.

While the Chinese government maintains ambitious strategic goals to dominate certain
global economic sectors, its ability to achieve those goals is hampered by its lack of domestic
innovation. Comments made by Chinese Premier Li Keqiang at a Communist Party gathering in March
2019 underscore this dilemma: 'Our capacity for innovation is not strong and our weakness in terms
of core technologies for key fields remains a salient problem.'¹ Given this identified weakness,
China resorts to various forms of economic aggression to achieve its strategic goals, including
hacking, theft, espionage, and recruiting 'non-traditional collectors' in academia to acquire U.S.
technologies and intellectual property. The China Initiative works with academia and private
industry to combat the PRC government's diverse counterintelligence threats.

'Again, an American professor stands accused of enabling the Chinese government's
efforts to corruptly benefit from U.S. research funding by lying about his obligations to, and
support from, an arm of the Chinese government and a Chinese public university,' said John C.
Demers, Assistant Attorney General for National Security. 'Honesty and transparency about funding
sources lie at the heart of the scientific research enterprise. They enable U.S. agencies to
distribute scarce grants for scientific research fairly and equitably. And they allow other
researchers to evaluate potential conflicts of interest and conflicts of commitment. When
researchers fall short of fulfilling these core academic values in ways that violate the
law, the Department stands ready to investigate and prosecute.'
Source: http://www.china.org.cn/china/NPC_CPPCC_2019/2019-03/16/content_74578930.htm

'We know that China exploits American universities to further the aims of the Chinese Communist
Party,' said U.S. Attorney Steven D. Weinhoeft. 'That's one reason why the National
Science Foundation requires applicants to disclose all sources of support, including foreign ties,
as a condition to receive federal grant funding. Prosecutions like this one play a critical role,
not just in protecting American investments in academic research from foreign exploitation,
but also in combating the growing threat that China poses to our national security.'
'The FBI takes seriously its commitment to work with our partners in academia to
protect U.S. research funded grants,' said Sean M. Cox, FBI-Springfield's Special Agent
in Charge. 'This investigation, like so many others, should serve as a reminder that failure to
be truthful and transparent on an application for U.S. funded grants is a violation of the law. In
this case the applicant allegedly failed to disclose his affiliation with China. Individuals who
fail to disclose their affiliation with any foreign nation will be held accountable.'

According to the indictment, Xiao has worked in SIUC's mathematics department since
2000, focusing his research on partial differential equations, control theory, optimization theory,
dynamical systems, and computational science. In that position, Xiao (who is an American citizen)
allegedly applied for and received NSF grant funds for a project set to run from 2019 to 2022
without informing NSF about another, overlapping grant he had already received from the Natural
Science Foundation of Guangdong Province, China. Xiao also allegedly failed to inform NSF that he
was on the payroll of Shenzhen University, a public university in Guangdong Province, and
that he had already committed to teaching and conducting research at Shenzhen University from
2018 to 2023.

The indictment further alleges that in March 2019, while his NSF grant proposal was still pending,
Xiao submitted another grant proposal to the Natural Science Foundation of China. According to the
indictment, Xiao allegedly applied for the funds as an employee of Shenzhen University and did not
disclose the new Chinese proposal to NSF. Xiao is charged with falsely certifying to SIUC that his
NSF grant proposal was true, complete, and accurate.

Before awarding the grant, NSF questioned Xiao about any current or pending funding
from 'worldwide sources,' including specifically whether he held any position outside the United
States or had obtained funding from any non-US funding sources. The indictment accuses Xiao of
falsely reporting to NSF that he had nothing else to disclose.

The defendant's initial court appearance has not yet been scheduled. If convicted, Xiao
faces a maximum penalty of 20 years in prison on each count of wire fraud and 5 years in prison
for making a false statement. All three charges are also punishable by a fine of up to $250,000. A
federal district court judge will determine any sentence after considering the U.S. Sentencing
Guidelines and other statutory factors.

FBI-Springfield, the IRS, and the Department of Homeland Security are investigating the
case. Assistant U.S. Attorney Peter T. Reed is prosecuting the case, with assistance
from NSD's Counterintelligence & Export Section.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty
beyond a reasonable doubt in a court of law.