Superseding Indictment for Former Harvard Chair on Tax and FBAR Crimes (7/29/20)

DOJ announced here the superseding indictment for tax-related crimes of Dr. Charles Lieber, the former Chair of Harvard University’s Chemistry and Chemical Biology Department.  See also  James S. Bikales and Kevin R. Chen, Former Chemistry Chair Lieber Indicted on Four Additional Felonies for Tax Offenses (Harvard Crimson 7/28/20), here.  The prior indictment was for making false statements to federal authorities.

Key excerpts from the announcement are:

Dr. Charles Lieber, 61, was indicted by a federal grand jury in Boston on two counts of making and subscribing a false income tax return and two counts of failing to file reports of foreign bank and financial accounts (FBAR) with the Internal Revenue Service (IRS).  In June 2020, Lieber was indicted on two counts of making false statements to federal authorities.  Lieber was arrested on Jan. 28, 2020. 

The superseding indictment alleges that Lieber served as the Principal Investigator of the Lieber Research Group at Harvard University, which received more than $15 million in federal research grants between 2008 and 2019. Unbeknownst to his employer, Harvard University, Lieber allegedly became a “Strategic Scientist” at WUT [Wuhan University of Technology] and, later, a contractual participant in China’s Thousand Talents Plan from at least 2012 through 2015.  China’s Thousand Talents Plan is one of the most prominent Chinese talent recruitment plans designed to attract, recruit and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security. 

Under the terms of Lieber’s three-year Thousand Talents contract, WUT allegedly paid Lieber a salary of up to $50,000 per month, living expenses of up to $150,000 and awarded him more than $1.5 million to establish a research lab at WUT.  It is alleged that in 2018 and 2019, Lieber lied to federal authorities about his involvement in the Thousand Talents Plan and his affiliation with WUT. 

According to the superseding indictment, in tax years 2013 and 2014, Lieber earned income from WUT in the form of salary and other payments made to him pursuant to the Strategic Scientist and Thousand Talents Contracts, which he did not disclose to the IRS on his federal income tax returns.  The superseding indictment also alleges that Lieber, together with WUT officials, opened a bank account at a Chinese bank during a trip to Wuhan in 2012.   Thereafter, between at least 2013 and 2015, WUT periodically deposited portions of Lieber’s salary into that account. U.S. taxpayers are required to report the existence of any foreign bank account that holds more than $10,000 at any time during a given year by the filing an FBAR with the IRS.  Lieber allegedly failed to file FBARs for the years 2014 and 2015.

Interestingly, in the announcement, the DOJ participating components are the National Security Division and USAO Massachusetts.  IRS CI is listed as among several law enforcement agencies making the announcement. The trial attorneys are as follows:  Assistant U.S. Attorney Jason Casey of Lelling’s [USA Massachusetts] National Security Unit is prosecuting this case with the assistance of Trial Attorney David Aaron of the National Security Division’s Counterintelligence and Export Control Section.  I could only speculate as to the reason for this lineup of investigating agencies and prosecutors or whether there might be yet more charges.

The Harvard Crimson article above quotes the predictable defense lawyer comment as:

Lieber’s lawyer, Marc L. Mukasey, wrote in a statement Tuesday that the indictment is “flat-out wrong.” 

“The notion that Professor Lieber was engaged in improper work with China is laughable,” Mukasey wrote. “He didn’t hide anything, and he didn’t get paid as the government alleges.” 

“He is innocent and his name will be cleared,” Mukasey added.

And, of course, the announcement has the standard ending caveat:  "The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law."