Former employee of COVID testing tycoon ordered to stand trial for extortion

Charles Huang, co-founder of Pasadena's Innova Medical.

Sept. 7, 2024 3 AM PT

A former employee of a Pasadena businessman whose company made billions of dollars selling COVID tests was ordered Friday to stand trial, along with two alleged accomplices, for attempting to extort $20 million from him by threatening to post sex tapes online.

Sunny Xiaolei Sun, 41, a former employee of Pasaca Capital, and Lihua Stearns, 58, and Xiadong She, 64, a Nevada couple, will each face trial on one count of extortion in the alleged plot against founder Charles Huang. They are not in custody, with the trial expected sometime next year.

Judge Rupa Goswami issued the ruling after a preliminary hearing in Pasadena Superior Court during which Huang testified over two days about his relationship with Sun, who was hired in April 2022 to be the chief of communications and public relations for his business, despite her background as a personal trainer.

Huang, 60, said Sun, who was living in New York, moved to Pasadena and was put up in a company condominium where the pair had “consensual” sex “five or six times” over the course of about six months — before their relationship broke down later in the year.

Huang testified that at an Arcadia Starbucks in January 2023 he met with Stearns, a friend of Sun, who said that the executive wanted $200 million in exchange for not posting the surreptitious videos she had made of them having sex.

Huang called the figure “laughable” because he didn’t have that kind of money, and he said the defendants eventually agreed that $20 million was a more reasonable amount. He said he made an initial payment of $600,000.

The businessman said he took the threats seriously because the public release of the videos could discourage potential business partners from working with him and destroy his marriage of more than 30 years. Court records show his wife filed for divorce this year but then dismissed the petition.

“I wanted to protect my reputation. As a businessman I have a reputation. As a private individual I have a reputation,” Huang, a native of Wuhan, China, said in the court hearing. “Once the video was exposed ... my family could absolutely be ruined.”

After the alleged extortion started, Huang said, he hired an attorney and a private detective and began surreptitiously recording conversations with the defendants. He also informed sheriff’s deputies of what was happening, and Stearns was arrested May 2, 2023, at a park in Arcadia where she went to meet Huang.

Her husband was arrested the next day after he went looking for her at Huang’s house in Arcadia. Sun turned herself in after the charges were filed on May 4, 2023. Sun, Stearns and She have pleaded not guilty.

The case comes amid bitter civil litigation between Huang and his former partners at Innova Medical Group, a subsidiary of Pasaca Capital that grossed more than $5 billion selling COVID antigen tests to the British government during the pandemic.

Huang has accused two former partners of stealing $106 million in commissions, while he has been accused by former partners, executives and business associates of wasting funds on poor investments and an extravagant lifestyle, including hiring his girlfriends. He has denied the accusations, though he admitted on the witness stand to having had sex with another executive at his companies.

Sun’s attorney, Garo Madenlian, argued in court that no extortion actually took place, because his client was actually trying to “foolishly” negotiate a settlement after her attorney at the time sent letters to Huang in early 2023 accusing him of luring Sun to Pasadena under the pretense of a job.

Prosecutors never presented any video as evidence. Huang testified that Stearns showed him a very brief video clip on her iPhone of him taking his trousers off, but it was unclear from the testimony if the video had been surreptitiously recorded.

Attorney David Lopez, who represents Stearns and She, argued that Stearns was acting under the direction of Huang to help resolve Sun’s claims. Huang acknowledged that in communications with him Stearns referred to him as “boss” in Mandarin and that he had offered the woman shares in one of his companies if she could sell COVID tests to hotel and casino chains in Las Vegas.

“They were trying to help,” Lopez said. “They are literally working for Mr. Huang.”

To have defendants stand trial, prosecutors need only show probable cause that a crime was committed.

Goswami ruled that the threat to “expose a secret” — a key element of extortion — was met by the prosecution. “It could be damaging on multiple different levels,” she said of the purported tapes. The crime, a felony, is punishable by up to four years served in a county jail.

In April, an anonymous plaintiff filed a civil lawsuit against Huang, accusing him of sexual battery, sex trafficking and other wrongdoing.

Huang’s attorneys filed a cross-complaint this week, accusing the plaintiff, Stearns and She of extortion.