By Melissa Korn and Aruna Viswanatha

Federal prosecutors charged a high-profile Massachusetts Institute of Technology mechanical engineering professor with fraud Thursday, alleging he failed to disclose extensive ties to and funding from the Chinese government in grant applications to the U.S. Department of Energy.

The professor, Gang Chen, was arrested at his Cambridge, Mass., home Thursday morning.

Dr. Chen, 56 years old, was born in China and is a naturalized U.S. citizen. He was charged with wire fraud, failing to file a foreign bank account report and making a false statement in a tax return. The top prosecutor in Boston said Dr. Chen appeared to have acted out of loyalty to China.

The Trump administration has worked to combat what it views as aggressive efforts by Chinese government-linked entities to improperly obtain U.S. academic research and conduct other alleged meddling at U.S. campuses. Federal prosecutors have brought more than a dozen criminal cases accusing academics of lying about receiving Chinese government funding or alleging that visiting researchers lied about their affiliation with the Chinese military.

"The problem is not the collaboration itself," said Andrew Lelling, U.S. Attorney for the district of Massachusetts, referring to work that researchers may do with foreign entities. "The problem is lying about it."

Joseph Bonavolonta, special agent in charge of the Federal Bureau of Investigation's Boston field division, said the FBI is opening a new China-related counterintelligence investigation about every 10 hours and nearly half the agency's 5,000 active counterintelligence investigations are related to China.

Prosecutors say Dr. Chen, an expert in nanotechnology, was working with the Chinese government at least as far back as 2012. He was asked by the Chinese consulate office in New York to work as an "overseas expert" for the country. He became a recruiter, helping Chinese programs that identify academics who could help its efforts in science and technology innovations, according to the prosecutors, and had other roles with the government and other Chinese entities.

They say he took steps to hide some of those ties, including asking an MIT colleague to remove from documents about a thermal energy company he set up in China any reference to his role as a participant in the People's Republic of China Talent Plan.

Prosecutors say that since 2013, Dr. Chen has received $19 million in federal grants from the U.S. In that time, they say, he also received $29 million in foreign funding, including $19 million from a public research university in China funded by the Chinese government. He maintained a bank account in China, according to prosecutors.

"His life has been the epitome of the American dream," said Robert Fisher, a partner at Nixon Peabody LLP representing Dr. Chen. "He has dedicated his life to scientific advancement in mechanical engineering. He loves the United States and looks forward to vigorously defending these allegations."

MIT said Thursday it was "deeply distressed" by Dr. Chen's arrest. "MIT believes the integrity of research is a fundamental responsibility, and we take seriously concerns about improper influence in U.S. research," the school said. "Prof. Chen is a long-serving and highly respected member of the research community, which makes the government's allegations against him all the more distressing."

Some of the academics charged with hiding their ties to China have pleaded not guilty and are fighting the charges in court. Several others have admitted to wrongdoing, including an Ohio State University rheumatology professor who pleaded guilty in November to lying on federal grant applications. He admitted that he worked to "hide his affiliation and collaboration with a Chinese university...in order to leverage millions of dollars of [National Institutes of Health] grants to advance Chinese medical research," according to a document filed in connection with his plea.

Another professor, from West Virginia University, was sentenced to three months in prison in July after admitting to lying about Chinese government funding he received. Prosecutors in September dropped another case that had accused a visiting Chinese scientist at the University of Virginia of stealing trade secrets from his professor, after the university acknowledged the scientist had been authorized to access some of the material.

In December, a professor pleaded guilty to lying to federal agents after he was accused of using his position as an academic researcher at University of Texas-Arlington to steal technology for Huawei Technologies Co.

The Justice Department's top national security official, John Demers, has described the arrests of several academic researchers last summer who allegedly lied on their visa applications about their status with China's People's Liberation Army as being the "tip of the iceberg." U.S. officials didn't previously know that so many visiting Chinese students had links to the Chinese military, he said, adding that more than 1,000 such researchers have since left the U.S.

The Justice Department's effort to prosecute cases against Chinese academics is facing increasing pushback from some faculty and Chinese-American groups.

Write to Melissa Korn at melissa.korn@wsj.com and Aruna Viswanatha at Aruna.Viswanatha@wsj.com

(END) Dow Jones Newswires

01-14-21 1602ET