Prior to that e-mail, Rogers proposed to Zhang to split the CFB by abandoning its sci-fi bio-battery and sugar-to-hydrogen concepts, while Rogers would trade near-term rare sugar. Zhang rejected the idea, and to no one’s surprise, he did not renew Rogers’ CEO contract, later citing his “failure to raise a single investment dollar.” But Rogers, who retained a small stake in the company as part of his compensation, was unwilling to walk away. In late December 2015, he sent an email to the CFB referring to a “clear” contradiction between the statements made by the company in the NSF grant applications when he was interim CEO and the statements made by Zhang.
Rogers, for example, noted that when Zhang told him that the production process rights for sugar phosphates were Chinese, the petition stated that the CFB had the rights and would commercialize the process in the US. “If there’s a problem,” Rogers warned, “I can’t look the other way. Of course, any form of grant fraud would cause potential licensees and potential investors to flee.”
In the email, Rogers reiterated his suggestion that CFB transfer rights to other rare sugars called tagatos and arabinose, as well as sugar phosphate processing rights, to the new startup it wanted to form. But he wanted to move forward quickly, ideally in a week. “If you need more time, please let me know, but time is running out,” he wrote.
Zhang again refused to split the company, And on January 6, 2016, the time expired. Rogers included Bonumoz in the state of Virginia, and nine days later sent an email to the NSF’s Office of the Inspector General entitled “Report of a potential NSF grant fraud.”
It cites some of the most damaging emails between Zhang and Rogers. In a post sent in the summer of 2015, Zhang writes: “About the Sugar Phosphate Project, experiments have been conducted by one of my colleagues and my satellite lab in China. Technology transfer will only take place in China. If funded by this project [the NSF]Most of the money will be used to fund other projects at CFB. ” That meant promising Tagatos research, which has not yet received any official NSF funding.
Others, with regard to the second NSF Inositol proposition, adopted a similar tactic: “Almost all experiments have been completed. Chun Yu [CFB’s chief scientist] And I have filed a Chinese patent on our behalf, it has nothing to do with CFB … if it is funded, most [the NSF money] Will be used for CFB to support other projects.
The use of government funds for a purpose other than the purpose for which they were awarded is strictly, and clearly, prohibited. Within weeks, the NSF began its investigation and suspended all payments to the CFB.