Prior to that email, Rogers had suggested splitting CFB so that Zhang would abandon his sci-fi biobattery and sugar-to-hydrogen concepts, while Rogers would commercialize the rarer sugars on a shorter notice. Zhang rejected the idea, and to no one’s surprise, he did not renew Rogers’ CEO contract, later calling his “failure to raise a single investment dollar.” But Rogers, who retained a small stake in the company as part of his compensation, wasn’t ready to walk away. In late December 2015, he emailed CFB referring to a “glaring” contradiction between statements the company had made in NSF grant applications while he was interim CEO and statements by Zhang.
For example, Rogers pointed out that although Zhang had told him the rights to the sugar phosphate manufacturing process were Chinese, an application stated that CFB owned 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 hint of subsidy fraud will make potential licensees and potential investors flee.”
In the email, Rogers reiterated his suggestion that CFB transfer the rights to tagatose and another rare sugar called arabinose, as well as the rights to the sugar phosphate process, to a new startup he planned to start. But he wanted to act quickly, preferably within a week. “If you need more time, let me know, but time is running out in different ways,” he wrote.
Zhang again refused to split the company, and on January 6, 2016, time ran out. Rogers recorded Bonumose in the state of Virginia and nine days later sent an email to the NSF’s Inspector General’s office entitled “Report of Potential NSF Grant Fraud.”
It quoted from some seemingly damning emails between Zhang and Rogers. In one, sent in the summer of 2015, Zhang writes, “On the sugar phosphate project, the experiments were conducted by one of my collaborators and my satellite lab in China. The technology transfer will only take place in China. If this project is funded by [the NSF], most of the money will be used to fund the other project in CFB.” That meant the promising tagatose study, which had not yet received official NSF funding.
Another, regarding a second NSF inositol proposal, took a similar course: “Almost all experiments… have been completed. Chun You [CFB’s chief scientist] and I filed a Chinese patent on our behalf, no relationship with CFB… If it is funded, most of [the NSF money] will be used for CFB to support the other projects.”
The use of government funds for any purpose other than that for which they were allocated is strictly and expressly prohibited. Within weeks, the NSF had begun its investigation and suspended all payments to CFB.