HAMILTON, Canada

A Chinese fugitive wanted in Canada, and an Israeli national, have been linked to an elaborate fraud scheme involving a secret, unlicensed biological laboratory discovered inside a US warehouse, a report said Thursday.

The report by the Los Angeles Times (LAT) said the case began in 2023 when a building inspector followed a foul smell into a supposedly vacant warehouse in Reedley, a small farming town in southeastern California, and found hundreds of vials labeled with dangerous diseases, including the coronavirus, HIV and Ebola, alongside 1,000 laboratory mice.

The warehouse was linked to Jia Bei Zhu, a Chinese national who prosecutors say imported hundreds of thousands of COVID-19 test kits from China and fraudulently sold them as American-made products, netting $1.7 million, said the report.

It noted that in January, federal agents raided a Las Vegas home connected to Zhu and arrested Ori Solomon, 55, an Israeli, on federal weapons charges.

Investigators removed lab equipment and more than 1,000 samples of unknown liquid from the property, which authorities said resembled materials found in the California warehouse.

The LAT report said a US congressional committee found that Zhu received more than $1.3 million in unexplained payments from Chinese banks, which investigators said cannot be accounted for by his known criminal activity alone.