Alleged
Conspiracy Uncovered Through Investigations into Large-Scale, International
Schemes to Import Counterfeit Goods and Drugs Through Port Newark
NEWARK—Two Taiwanese nationals are
charged for allegedly seeking to export sensitive U.S. military technology to
China after federal agents investigating counterfeit goods smuggling uncovered
plots to smuggle drugs into and sensitive defense articles out of the United
States, Paul J. Fishman, U.S. Attorney for the District of New Jersey; and
Michael B. Ward, Special Agent in Charge for the FBI Newark Division, announced
today.
Hui Sheng Shen, aka “Charlie,” 45; and
Huan Ling Chang, aka “Alice,” 41, were previously charged in connection with an
alleged scheme to import 50 kilograms of crystal methamphetamine, or “meth,”
from Taiwan into the United States. Those charges arose as a result of parallel
international investigations that also disrupted conspiracies to import
hundreds of millions of dollars in counterfeit goods from China.
Federal agents arrested Shen and Chang
on February 25, 2012 in New York. The pair was charged in a criminal complaint
unsealed March 2, 2012, with one count of conspiracy to import and one count of
importation of meth. The amended complaint unsealed today also charges Shen and
Chang with conspiracy to violate the Arms Export Control Act.
According to the amended complaint,
approximately one kilogram of nearly pure crystal meth was purchased from Shen
and Chang as part of an undercover law enforcement operation, which stopped the
importation of dozens of additional kilograms of the drug. Based on
relationships undercover law enforcement agents built with Shen and Chang, the
two defendants allegedly provided a list of sensitive defense articles they
sought to buy and planned to return to connections in China. The articles
included unmanned aerial vehicles (commonly known as drones), E-2C Hawkeye
surveillance airplanes, and stealth technology relating to F-22 fighter planes.
Shen and Chang are scheduled to appear
before U.S. Magistrate Judge Cathy L. Waldor this afternoon in Newark federal
court.
“Initial investigations into counterfeit
goods importation led federal law enforcement to a meth trafficking operation
and an alleged plot to export some of America’s most sensitive weapons and
related technology to China,” said U.S. Attorney Fishman. “The charges against
Shen and Chang illustrate starkly why we do this work, and what is at stake
when the security of our ports is breached for any reason. National security
isn’t an a la carte enterprise. The same conduits that bring knockoff sneakers
flood our communities with illegal drugs and establish dangerous criminal
relationships.”
According to documents filed in this and
related cases and the amended criminal complaint unsealed today:
Soon Ah Kow, 72, of Hong Kong, was
charged by indictment with drug importation, smuggling, and counterfeit goods
trafficking offenses by a Newark federal grand jury on January 6, 2012 and
arrested on February 25, 2012 in Manila, the Philippines. Ah Kow was in the
business of brokering international transactions of illegal goods. Operating
out of Southeast Asia, he met with and introduced his co-conspirators to
undercover federal agents (FBI UCs) for the purpose of importing counterfeit
goods and narcotics from Asia to the United States.
In late 2010, Ah Kow began discussions
with FBI UCs about narcotics importation, meeting in February 2011 with FBI UCs
in Manila where he introduced them to his associates, Shen and Chang. In
Manila, Ah Kow told the FBI UCs that Shen and Chang represented the interests
of Ah Kow’s associates, wealthy narcotics dealers who had been trafficking
drugs for more than 25 years. Ah Kow and Shen arranged for the delivery of a
sample of crystal meth to the FBI UCs’ hotel lobby, which arrived within hours
of a call Ah Kow placed to an associate.
Following negotiations over recorded
telephone calls and intercepted e-mails, the FBI UCs arranged payment to cover
the price of one kilogram of crystal meth, shipping costs, and a broker’s fee
for Ah Kow. In July 2011, the FBI UCs received a bill of lading for the
container that included the meth, which arrived at the port on August 9, 2011.
The drugs were discovered secreted within the container in the exact location
described by Shen and Chang.
During negotiations for the one kilogram
meth deal, Shen and Chang made clear they usually did larger transactions, but
agreed to do a smaller transaction to establish trust among the parties. They
discussed shipping more than 50 kilograms of meth to the United States.
In September 2011, Shen and Chang asked
whether the FBI UCs could obtain and pass along highly sensitive military
technology, specifically, a Hawkeye reconnaissance aircraft, which the
defendants instructed should be referred to as the “big toy.”
During other recorded conversations, the
defendants indicated their clients were interested in a range of American
military technology. Shen, Chang, and an FBI UC met in October 2011 in Las
Vegas, where they discussed narcotics and the export of the technology. Chang
provided the FBI UC with a list of specific military technology items they
sought.
At a Las Vegas meeting, FBI UCs asked
what purposes Shen and Chang had for any military technology they were seeking
to obtain. When an FBI UC stated, “I would prefer not to make money on
something that would hurt the United States,” Shen replied, “I think that all
items would hurt America.”
During a series of recorded phone
conversations and in-person meetings, the defendants told FBI UCs that their
associates were connected to the Chinese government, worked for a Chinese
intelligence company like the CIA, and would be using government money to make the
purchases.
Describing their associates in one call,
Chang said, “Their status is a bit special, so in order to travel to U.K. or
United States, all developed countries, for them it’s hard for them to...” Shen
interrupted, “They are spies. They, they, they are very hard to get a visa.
They cannot go to U.S. or U.K.”
Shen and Chang returned to the United
States in February 2012 to finalize negotiations for a series of larger drug
transactions and to look at and photograph certain military technology that the
FBI UCs said they had acquired. Shen and Chang met with FBI UCs in New York to
see a small drone, used by the U.S. military, as well as manuals associated
with other drones. Shen and Chang had purchased cameras for the explicit
purpose of taking photographs of the defense technology. The pair planned to
avoid law enforcement detection by taking photographs, deleting those
photographs, and bringing the memory cards back to China, where a contact had
the ability to recover deleted items. The defendants took the photos, but FBI
agents were there to arrest them before the photos could be deleted.
The conspiracy to violate the Arms
Export Control Act charge carries a maximum potential penalty of five years in
prison and a $250,000 fine. The meth importation conspiracy and meth
importation charges each carry a mandatory minimum penalty of 10 years in
prison and a maximum penalty of life in prison and a $4 million fine.
U.S. Attorney Fishman praised special
agents of the FBI, under the direction of Special Agent in Charge Ward in
Newark, for the investigation leading to the export violation conspiracy
charge, as well as ICE Homeland Security Investigations, under the direction of
Special Agent in Charge Andrew M. McLees, for its work in the parallel
investigation. He also thanked Customs and Border Protection, under the
direction of Robert E. Perez, Director, New York Field Operations, for its
important role. U.S. Attorney Fishman also credited the U.S. Air Force Office
of Investigations; FBI special agents in Manila, Beijing, Hong Kong, and
Taiwan; the Philippine authorities; and the Department of Justice’s Organized
Crime and Gangs Section, National Security Division, Office of Enforcement
Operation, and Office of International Affairs for their contributions.
The government is represented by
Assistant U.S. Attorney Zach Intrater and Chief Erez Liebermann of the Computer
Hacking and Intellectual Property Section of the U.S. Attorney’s Office
Economic Crimes Unit and Assistant U.S. Attorney Andrew Pak of the Office’s
General Crimes Unit in Newark.
The charges and allegations contained in
the amended complaint charging Shen and Chang and the indictment charging Ah
Kow are merely accusations, and the defendants are considered innocent unless
and until proven guilty.
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