A months-long investigation into a rural California warehouse uncovered an illegal laboratory that was filled with infectious agents, medical waste and hundreds of mice bioengineered "to catch and carry the COVID-19 virus," according to Fresno County authorities.

Health and licensing said Monday that Prestige Biotech, a Chinese medical company registered in Nevada, was operating the unlicensed facility in Reedley, California — a small city about 24 miles southeast of Fresno. The company, according to Reedley City Manager Nicole Zieba, had a goal of being a diagnostics lab.

"They never had a business license," Zieba told USA TODAY. "The city was completely unaware that they were in this building, operating under the cover of night."

The Fresno County Public Health Department launched its investigation into the facility in December 2022 after a code enforcement officer saw a garden hose attached to a building that was presumed to be vacant and had no active business license, Zieba said.

Further inspection in March revealed that the facility housed various chemicals, suspected biological materials, bodily fluids and hundreds of lab mice, among other lab supplies, according to court documents.

County public health officials said they also found medical devices that were believed to have been developed on-site, such as COVID and pregnancy tests.

"Being a small, rural town of 26,000 — walking into what we believed to be a vacant building and finding lab supplies, live white mice... was was fairly shocking," Zieba said.

Following several attempts to communicate with Prestige Biotech, Fresno County officials are accusing the company of not being forthcoming with information and failing to comply with orders, such as providing a plan for hazardous and medical waste disposal.

Fresno County Public Health staff completed biological abatement work of all the materials found in the facility by July 7, according to court documents.

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CDC detected at least 20 infectious agents

Zieba said officials had to conduct a separate investigation into the warehouse for several weeks because it was private property.

After authorities discovered there were people working inside the building, Zieba said federal, state and local agencies joined the investigation, including the county health department and Federal Bureau of Investigation. Authorities were then able to serve an inspection warrant in March.

"Certain rooms of the warehouse were found to contain several vessels of liquid and various apparatus," court documents said. "Fresno County Public Health staff also observed blood, tissue and other bodily fluid samples and serums; and thousands of vials of unlabeled fluids and suspected biological material."

Hundreds of mice were also found at the warehouse, where they were "kept in inadequate conditions in overcrowded cages" with no food or water, according to court documents. An associate with Prestige Biotech told investigators that the mice were "genetically engineered to catch and carry the COVID virus," the documents added.

Under an abatement warrant, the city seized the mice in April and euthanized 773 of them. At the time of the abatement process, 178 mice were already deceased, court documents said.

Zieba said officials called in the Centers for Disease Control and Prevention after about 30 freezers and refrigerators were found, with some set to negative 80 degrees. The CDC detected at least 20 potentially infectious agents, according to court documents.

"Ultimately, what we did find is some viruses, such as HIV, COVID, chlamydia, rubella, malaria, things of that nature," Zieba said.

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What is Prestige Biotech?

Prestige Biotech had been operating the unlicensed and unregulated laboratory since October 2022, according to court documents.

Emails between city officials and Xiuquin Yao, the company president, showed that Prestige Biotech had assumed assets from the now a defunct company, Universal Meditech Inc. (UMI). Prestige Biotech was a creditor to UMI and became its successor, court documents added.

The assets were then moved to the Reedley warehouse from a previous site located in Fresno, court documents said.

Authorities were unable to find any California-based addresses associated with the company except for UMI's Fresno location. Court documents noted that other addresses provided were either "empty offices or addresses in China that could not be verified."

During the investigation, Zieba said the company reported that it was making COVID and pregnancy tests with "a goal of being a diagnostics lab."

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