U.S. Attorney's Office
Southern District of California
(619) 557-5610
January 7, 2015

Ansun Biopharma to Pay More Than $2 Million for Overbilling the U.S.

United States Attorney for the Southern District of California Laura E. Duffy announced that a local biopharmaceutical company, Ansun Biopharma, Inc., entered into criminal and civil settlements with the Department of Justice that will require it to make approximately $2 million in payments to the United States. These settlements resolve a criminal and related civil investigation against Ansun for submitting false and fraudulent claims on grants and a contract with the National Institutes of Health (“NIH”).

Ansun Biopharma, Inc., formerly known as NexBio, Inc., is a biotechnology company headquartered in San Diego, California, that, from 2004 through 2011, had received several research grants and a contract from the NIH. Among these were a grant award for “Broad-Spectrum Therapeutics for Influenza,” a grant award for “Development of Fludase as an Anti-Influenza Agent,” and, in September 2006, a $50 million contract to develop a drug to combat influenza (the “Fludase Contract”). Fludase was an experimental antiviral drug for the treatment of influenza.

According to the settlements, Ansun’s former Chief Executive Officer, Mang Yu, directed its then- Vice President of Finance and Administration (who was responsible for the accounting department) Dongmei Wang, to fabricate timesheets for company employees to maximize billing on the NIH grants and the Fludase Contract.

The company admitted that in 2009, it created a time-keeping policy that required employees to accurately record the number of hours devoted to certain projects, including projects covered under the Fludase Contract and other NIH-funded grants. The policy also required employees to accurately record the number of hours attributed to overheard, General &Administrative, and other labor categories. Despite these time-keeping requirements instituted by NexBio, Yu directed accounting personnel to maximize reimbursements from NIH, regardless of the actual number of employee hours spent on the Fludase Contract or the other NIH-funded grants. In particular, Yu directed Wang to bill employee hours to the Fludase Contract, even if the project the employee was working on did not fall within the scope of the Fludase Contract.

The company also acknowledged that Yu informed Wang that NexBio should use the money authorized by the Fludase Contract whenever possible, in case NIH terminated the Fludase Contract before NexBio had used all the allotted funds. In addition, Yu told Wang to extend the funding available on the NIH grants for as long as possible because he needed access to the money from the grants to manage cash flow problems at the company.

To comply with Yu’s orders, Wang corrupted the integrity of the employee time-keeping system by fabricating timesheets for certain employees, altering the number of hours entered on certain timesheets and moving employee hours from one labor category to another, and from non-government projects to either the Fludase Contract or one of the NIH grants. The purpose and effect of these alterations was to obtain money from NIH, even if the work was not covered under the terms of the Fludase Contract or NIH grants.

For this conduct, occurring from the 2004 to 2011, a criminal information was filed today charging Ansun with a violation of Title 18, United States Code, Section 1031, executing a scheme to defraud the United States in a contract valued more than $1 million. As part of its settlement, Ansun has agreed to pay the NIH $1,654,600.00.

Separately, Ansun entered into a settlement agreement with the United States to resolve civil allegations that it violated the False Claims Act by submitting invoices that falsely stated the number and category of hours worked by employees in connection with several research grants and a contract funded by NIH. The fabricated invoices resulted in the submission of false claims from September 1, 2006, through June 30, 2011. Ansun agreed to settle the civil matter with a payment of $495,000 to the United States. The False Claims Act is the government’s primary civil remedy to redress false claims for government funds under government contracts and research grants.

Wang was previously charged and pled guilty to executing a scheme to defraud the United States in a contract valued more than $1 million, in violation of Title 18, United States Code, Section 1031. After Wang complied with the terms of a deferral agreement, that charge was dismissed in December 2014.

Yu was previously charged and pled guilty to interfering with officers of the Department of Health and Human Services, in violation of Title 42, Section 262(c), (e), and (f), and was sentenced to one year of probation in August 2014.


  • MANG YU, 58 Rancho Santa Fe, CA
  • DONG MEI WANG, 49 San Diego, CA

Criminal Case Nos.

  • United States v. Ansun Biopharma, Inc., 15CR0024-DMS
  • United States v. Mang Yu, 14CR2352-AJB
  • United States v. Dongmei Wang, 13CR2056-MMA


Executing a Scheme to Defraud the United States, in violation of 18 U.S.C. § 1031.

Maximum Penalties for a corporation: Five years’ probation, $5,000,000 fine or twice the gross gain or gross loss resulting from the offense, $400 special assessment, restitution.

Interference with Officers of United States Department of Health and Human Services, in violation of 42
U.S.C. § 262

Maximum Penalties: One year imprisonment, $100,000 fine, $25 special assessment, five years’ probation.

Civil Case No.


  • Department of Health and Human Services, Office of the Inspector General
  • Federal Bureau of Investigation
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