Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.

2 Page 1 of 7

CONTINUATION OF COMPLAINT

1. My name is Bruce D. Fowler. I am a Special Agent (SA) with the Federal Bureau of

Investigation (FBI), and have served as such for over six years. I am currently assigned to the

Lansing Resident Agency of FBI Detroit Division, and my duties include investigating

suspected violations of wire fraud and money laundering.

2. In 2013, I opened an investigation into the activities of Dr. Ning Xi, who is a citizen of

China, a Permanent Resident of the United States, and a former resident of Michigan. He is

also a world-renowned expert in the field of robotics, nano-sensors and devices, and intelligent

control and systems. My investigation of Xi began when he was a professor of Electrical and

Computer Engineering at Michigan State University (MSU), and was originally focused on

whether he had fraudulently obtained federal research grants from the National Science

Foundation (NSF) by omitting information about his receipt of funds from the State Key

Laboratory on Robotics in the Shenyang Institute of Automation, which is a government entity

of the Peoples Republic of China (PRC). Over time, the investigation produced evidence that

Xi had defrauded both MSU and the Institute of Electrical and Electronics Engineers (IEEE), a

non-profit corporation headquartered in New York, of hundreds of thousands of dollars by

submitting false reimbursement claims for travel and related expenses. 1

3. The information provided here is known to me personally as result of my investigation,

and from review of documents and interviews of people with direct knowledge of events.

Because it is provided for the limited purpose of demonstrating probable cause to believe Xi

1
The IEEE is a professional organization with worldwide membership that enjoys international
prestige within the scientific community. Its membership of over 420,000 engineers resides in
over 160 countries, and it sponsors conferences, professional and educational activities, and
publications.

1
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.3 Page 2 of 7

has committed wire-fraud, in the Western District of Michigan and elsewhere, this summary

does not include every relevant fact know to me.

4. Xi was first employed by MSU in 1997, and he eventually rose to the position of

Distinguished Professor and Director of the Robotics and Automation Laboratory. Beginning

in January 2011, Xi went on sabbatical leave from MSU to assume an administrative position at

City University of Hong Kong (CUHK) as the Chair Professor of Mechanical Engineering.

Although Xi initially requested a one-year leave of absence, he extended his sabbatical each

year. However, in September 2013, CUHK provided a verification of employment letter to

MSU officials to confirm that Xi was no longer employed at MSU. In further discussions with

CUHK, MSU became aware that Xi had obtained a tenured professor’s position at CUHK.

According to CUHK policy, employees could only hold one tenured position at a time. MSU

officials advised CUHK that Xi was still a tenured professor at MSU, and also communicated a

demand to Xi that he return and resume his duties at MSU. Xi resigned from CUHK and

returned to MSU in June 2014. 2

5. MSU conducted an internal investigation of Xi's activities, and concluded that he had

committed “unacceptable research practice” by assuming a second tenured position, as well as

by failing to disclose his Chinese affiliations, research and funding in federal grant applications

he had submitted to the NSF, and suspended him without pay for three weeks in the Fall of

2014. The following year, MSU officials discovered information indicating that Xi had

accepted a second position at the University of Hong Kong as the Chair Professor for the

Department of Industrial and Manufacturing Systems Engineering, again in violation of MSU

2
Xi had received 50% salary from MSU during 2011, and was then in a no-pay status with
MSU until he returned in 2014.
2
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.4 Page 3 of 7

policy. Xi was uncooperative when questioned, his superiors recommended that he receive a

six-month suspension from MSU, and Xi responded by tendering his resignation in October

2015.

5. In January 2016, I was informed by a confidential source at MSU that, according to the

open-source University of Hong Kong website, Xi had been appointed as the Chair Professor of

Robotics and Automation, as well as the Director of the Emerging Technologies Institute.

6. Xi returned to the United States through San Diego on 13 Feb. 2016, and was

interviewed by the FBI upon arrival. Xi stated that he resides in both China, at the Royal Park

Hotel in Hong Kong, and in the United States at his residence in Okemos, Michigan. Xi stated

that he was employed at the University of Hong Kong, and denied any affiliation with any other

Chinese university or research institution. He stated that he had worked with the Chinese

Academy of Sciences (CAS) in the past, but denied that he had been paid by CAS or by any

other entity associated with the PRC. Xi denied that he had ever intentionally omitted

disclosing any foreign research affiliations, funding, or foreign salary when he applied for U.S.

Government research grants, and stated that if he had forgotten to include any such information,

NSF should have known he was working with another foreign agency because this information

was “in the applications.”

7. Grant applications submitted by Xi to MSU were obtained by NSF from MSU pursuant

to administrative subpoenas served in April 2015. NSF review of those documents, and

interviews of the NSF program managers who awarded the grants to Xi, disclosed that Xi had

not disclosed his foreign affiliations and income in his federal grant applications to NSF.

8. Xi also told the interviewing agents that he had received between $100,000 - $200,000

in reimbursements from IEEE, and that those reimbursements had been paid by numerous

3
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.5 Page 4 of 7

persons within IEEE.

9. To date, the investigation has disclosed that Xi received approximately $1.2 million in

reimbursements from IEEE based on claims he submitted since 2009. Nearly all of the

reimbursement checks that Xi received from IEEE were signed by Weihua Sheng. Sheng, who

is also a Chinese citizen, was a doctoral student of Xi's at MSU, and he is now a professor at

Oklahoma State University. Sheng also served as the Treasurer for ten different IEEE

conferences, seven of which were chaired by Xi. Each conference put on by IEEE has its own

bank account, and two persons are authorized to draft checks on that account: the conference

chair, and the conference treasurer.

10. After his separation from MSU, Xi continued to submit requests for travel

reimbursements to MSU, prompting persons in the travel-claim system to review the validity of

Xi’s reimbursement requests. On or about 15 Dec. 2016, I was provided with several batches

of disbursement vouchers for travel reimbursements that MSU had paid out to Xi. My review

of those documents determined that a significant percentage of the receipts that Xi had

submitted to MSU as justification for travel reimbursements appeared to have been fabricated,

were for charges that had already been refunded to Xi’s credit cards by various airlines, were

for fares that had been exchanged for different flights, and/or were for expenses that had

already been reimbursed by IEEE. Ticket numbers and booking codes on documents that Xi

submitted to MSU were cross-checked against information provided by IEEE, United Airlines,

Delta Airlines, Orbitz, Chase Bank and American Express. This process demonstrated that the

same unique ticket numbers appeared repeatedly in receipts that Xi submitted for different

travel reimbursements from both MSU and IEEE, those ticket numbers routinely did not appear

on the credit card statements for accounts that Xi claimed to have used to pay for the tickets,

4
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.6 Page 5 of 7

and the records of the airlines in question either a) did not contain those ticket numbers; b)

showed that Xi had not traveled on those ticket numbers; c) showed that Xi had been refunded

by the airline for those ticket numbers; or d) showed that those ticket numbers had been

exchanged for different tickets.

11. During 2015 and 2016, I obtained voluminous documents from IEEE through grand jury

process. These documents included the June 2016 production of a Final Internal Audit Report

on the 2014 IEEE International Conference on Robotics and Automation (ICRA), which was

held in Hong Kong from 31 May to 7 June 2014 and was chaired by Xi. The report included the

following findings:

a. Travel expenses for other conferences (2011 IROS, 2012 IROS, 2013 IROS,

2014 IROS and 2014 NEMS) were paid to the Conference Chair, Ning Xi, from the 2014 ICRA

concentration banking account (travel expenses included trips to San Francisco, Chicago,

Hawaii, Toronto, Hungary, Bangkok, Beijing, Australia, Macau, Taipei, Portugal, Germany).

No expense reports nor any business purpose was provided for any trips taken facilitating the

commingling of funds for multiple conferences in a period of 4 years. In addition, there were

no meeting minutes available to justify these expenses.

b. Expense reimbursements for amounts over $25,000 were paid by way of

separate checks each under $25,000 (expenses included lodging, meals, transportation, cruises,

banners and items such as liquor, electronics, etc.).

c. The documentation provided to support the Conference Chair's reimbursements

was inadequate. There were no expense reports provided by the Conference Chair. The

business purpose was not stated and a list of attendees was not provided for entertainment/meal

expenses for more than one person. However, with regards to expense reimbursement, clear

5
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.7 Page 6 of 7

instructions were provided to other volunteers and the appropriate documentation was received.

d. Expenses were not claimed in a timely manner, several were three to four years

in arrears. Expenses for multiple trips with some spanning three to four years were submitted

together for reimbursement (such expenses go back as far as 2011, 2012, 2013 and 2014).

e. Gift items were purchased by the Conference Chair (including IPads, IPhone 6

plus, IPad accessories, computer adapters, liquor, Swarovski crystal items, hand truck,

supermarket items, etc.), with no business purpose stated on the receipts, nor was a list of

recipients provided.

f. Expense reimbursements included travel expenses incurred by the Conference

Chair for multiple trips after the 2014 ICRA conference concluded. No detail for the same was

provided. The last reimbursement was issued in December 2015.

12. In October 2016, IEEE provided a flash drive containing evidence related to

reimbursements that IEEE had paid to Xi. The flash drive included a spreadsheet detailing the

payment amounts for 27 checks provided to Xi for the 2014 ICRA conference, all of which had

been signed by Weihua Sheng as Conference Treasurer. The checks totaled $470,139.69.

13. In December 2016, I received documents from IEEE related to reimbursements paid to

Xi for the following conferences in the following amounts:

- ROBIO 2008: $140,224.89

- NMDC 2009: $38,604.42

- IROS 2009: $243,165.39

- NanoMed 2013: $15,221.92

- ICRA 2014: $470,139.69

- NEMS 2015: $85,162.36

6
 Case 1:18-mj-00028-RSK ECF No. 1-1 filed 02/14/18 PageID.8 Page 7 of 7

- ROBIO 2015: $86,075.00

o Total: $1,078,593.67

14. Michael Lindsay, a partner at the law firm of Dorsey & Whitney, LLP, which represents

IEEE as outside legal counsel, informed me that Xi was an organizer of approximately nine

IEEE conferences, some of which occurred before the time frame indicated in the subpoena.

15. During March 2017, I received and reviewed additional records from United and Delta

airlines. My review of these records disclosed that ticket receipts submitted by Xi did not

match flight information stored in the United and Delta Airlines databases. In many instances,

neither United nor Delta had any information pertaining to ticket numbers that Xi claimed he

purchased and traveled on.

16. The investigation has assessed more than $429,000 in fraudulent activity associated with

the reimbursements from IEEE and MSU paid to Xi between 1 Jan. 2011 and 31 Jan. 2016. Xi

ultimately received and deposited several dozens of checks from MSU and IEEE into his

MSUFCU accounts; these funds were typically used to pay off significant credit card debt,

primarily to American Express and Chase. The fraudulent activity includes reimbursements

obtained by Xi as a result of a receipt being altered, a receipt being completely fabricated, a

receipt being purchased and then refunded or voided, or some other material falsehood that was

used in Xi’s scheme to defraud. For reimbursements from IEEE, Xi’s fraudulent

reimbursement requests caused money to be wired from IEEE accounts to Xi’s personal

account at MSUFCU. For reimbursements from MSU, Xi also electronically signed the

fraudulent reimbursement requests and often provided his approval and verification of

authenticity for the requests via email, which also caused money to be wired from MSU

accounts to Xi’s personal account at MSUFCU.