A police investigation found that Xu had convinced 35 people to invest in a fictitious research company that he claimed would search for a cure to SARS in China, according to a press release issued by the Boston Police Department last Tuesday.
Xu promised the alleged victims that he would return the money in a few weeks, but investigators believe he kept the funds for himself.
The Dana-Farber Institute alerted the Boston Police Department to allegations from Xu’s former co-workers and then helped police set up interviews with them, according to a statement released by the Institute last Wednesday.
It was during one of these interviews on Tuesday that detectives learned of Xu’s presence in a nearby food court and arrested him.
Xu pleaded innocent Wednesday at the Roxbury District Court to one count of larceny by scheme over $250. He is currently being held on $600,000 bail.
Although police now believe Xu stole over $600,000, he is currently being charged with stealing $160,000. If convicted, he could face a maximum sentence of five years in prison and a $25,000 fine. Xu is due back in court on April 23, where he may face further charges.
According to Xu and his attorney Arnold Abelow, Xu sent the investors’ money to a Nigerian investment group and expected a $50 million return. The police are investigating Abelow’s claim that Xu invested with the Nigerian group.
At this time police do not believe that Harvard University or the Dana-Farber Institute had any knowledge of Xu’s plan. As of two weeks ago, both institutions had terminated Xu’s employment.
Neither Xu nor Abelow could be reached for comment.
—Materials from the Associated Press were used in the reporting of this story.