...25 Years in Prison...Smuggling Schemes...Plot to Bring Surface-to-Air Missiles Into United States

Southern California Man Sentenced to 25 Years in Prison for Convictions in Smuggling Schemes, Including Plot to Bring Surface-to-Air Missiles Into United States

LOS ANGELES—A Southern California man was sentenced this morning to 25 years in federal prison after being convicted on a series of federal charges related to schemes to smuggle many items into the United States, including surface-to-air missiles designed to shoot down aircraft.

Yi Qing Chen, 49, of Rosemead, California, received the 300-month sentence from United States District Judge Dale S. Fischer.

Last October, following a two-week trial, a federal jury convicted Chen of five felony counts—conspiracy to distribute methamphetamine and cocaine, distribution of cocaine, trafficking in counterfeit cigarettes (approximately 800,000 cases of cigarettes), trafficking in contraband cigarettes, and conspiracy to import missile systems designed to destroy aircraft.

During this morning’s hearing, Judge Fischer said Chen “never saw a criminal scheme he didn’t want a part of.”

The evidence presented during the trial showed that Chen conspired to smuggle, among other things, Chinese-made QW-2 shoulder-fired missiles into the United States. The guilty verdict in the missile plot was the nation’s first conviction at trial under an anti-terrorism statute that outlaws the importation of missile systems designed to destroy aircraft. Enacted in December 2004, the statute carries a mandatory minimum penalty of 25 years in federal prison.

“Mr. Chen was the first person in the nation to be indicted for plotting to smuggle anti-aircraft missiles into the United States after the 9/11 attacks,” said United States Attorney André Birotte Jr. “The 25-year sentence imposed today appropriately reflects the severity of the threat this conspiracy posed to the security of the United States.”

The case against Chen is the result of Operation Smoking Dragon, an FBI-led undercover investigation into smuggling operations in Southern California. Smoking Dragon and a related investigation in New Jersey led to the indictment of 87 individuals on charges related to international conspiracies to smuggle counterfeit United States currency, drugs and other contraband into the United States. Operation Smoking Dragon resulted in four indictments and nearly three dozen convictions in Los Angeles. Chen is the final defendant to be sentenced in relation to Operation Smoking Dragon.

“Today’s sentencing of Mr. Chen is the result of eight years of investigative work by agents and prosecutors assigned to the Smoking Dragon case,” said Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles. “The defendant’s willingness to smuggle surface-to-air missiles into this country or anywhere is a frightening concept because there can be no confusion as to the purpose of such contraband—nor to the potentially horrific consequences for innocent people.”

In 2006, a man who conspired with Chen pleaded guilty in relation to various smuggling plots, including the scheme to bring the surface-to-air missiles into the United States (see: http://www.justice.gov/usao/cac/pressroom/pr2006/044.html). That co-defendant, Chao Tung Wu, died while pending sentencing and before Chen was brought to trial.

The evidence in the case showed that Chen and Wu met with an undercover FBI agent and agreed to arrange the importation of shoulder-fired QW-2 missiles, as well as launch and operation hardware for the missiles, from the People’s Republic of China. The missiles were never delivered because Wu and Chen were arrested in 2005 before the deal was concluded.

“Recordings played during trial, of defendant [Chen] and Wu, included discussions that they had engaged in a wide range of criminal activity, including narcotics and counterfeit cigarette trafficking and shipping vehicles to China in containers where documents fraudulently identified their contents,” prosecutors wrote in papers filed in court prior to today’s sentencing. “It was undisputed that Wu never conducted any legitimate business during the relevant period of time.”

In addition to the 25-year prison term, Judge Fischer ordered Chen to pay $520,000 to Philip Morris for the counterfeit cigarettes he smuggled into the United States.

Operation Smoking Dragon was an investigation run by the Federal Bureau of Investigation, which received substantial assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Immigration and Customs Enforcement. The United States Secret Service assisted in the investigation in relation to the smuggling of counterfeit $100 bills called “Supernotes” that are believed to have been manufactured in North Korea.

Previously...

NOTE The following text is a quote:

http://www.justice.gov/usao/cac/pressroom/pr2006/044.html

FOR IMMEDIATE RELEASE
April 19, 2006 For Information, Contact Public Affairs

SOUTHERN CALIFORNIA MAN PLEADS GUILTY IN SCHEMES TO SMUGGLE NARCOTICS, CIGARETTES, COUNTERFEIT MONEY AND SURFACE-TO-AIR MISSILES INTO UNITED STATES

Los Angeles, CA - Admitting his role in a series of conspiracies, a Southern California man today pleaded guilty to a host of federal charges related to schemes to smuggle many items into the United States, including a plot to smuggle into the country surface-to-air missiles designed to shoot down aircraft.

Chao Tung Wu, 51, of La Puente, appeared in United States District Court and admitted that he conspired to smuggle, among other things, Chinese-made QW-2 shoulder-fired missiles into the United States. The guilty plea in relation to the missile is the first conviction in the nation under an anti-terrorism statute that outlaws the importation of missile systems designed to destroy aircraft. Enacted in December 2004 as part of an intelligence reform package, the statute carries a mandatory minimum penalty of 25 years and the possibility of life without parole in federal prison.

A second man charged in the missile smuggling scheme – Yi Qing Chen, 41, of Rosemead, California – is scheduled to go on trial in that case on June 27.

The case against Wu and Chen is the result of Operation Smoking Dragon, an FBI-led undercover investigation into smuggling operations in Southern California. Smoking Dragon and a related investigation in New Jersey this summer led to the indictment of 87 individuals on charges related to international conspiracies to smuggle counterfeit United States currency, drugs and other contraband into the United States.

According to a statement of facts read in court today when Wu pleaded guilty, Wu and Chen met with an undercover FBI agent and agreed to arrange the importation of hundreds of QW-2 shoulder-fired missiles, as well as launch and operation hardware for the missiles, from the People’s Republic of China. Wu and Chen told the undercover agent that a third country would pretend to order and receive shipment of the missiles from the manufacturer, but the missiles would, instead, ultimately be shipped to the United States in sea-land containers. Wu, Chen and unindicted co-conspirators allegedly were to pay bribes to customs officials in other countries to ensure the shipment. One payment was to be a $2 million bribe to an official in a foreign country. The missiles were never delivered because Wu and Chen were arrested last August before the deal was concluded. According to the indictment still pending against Chen, after the arrests, a confederate in the PRC continued to contact an undercover FBI agent to discuss consummating the proposed sale.

Wu also pleaded guilty to conspiring to smuggle “Supernotes” – extremely high quality counterfeit $100 bills – into the United States. Wu, who told the undercover agent that the counterfeit bills were manufactured in North Korea, agreed to provide $2 million worth of Supernotes. As part of the investigation, nearly $2 million in counterfeit $100 bills were seized at the Port of Los Angeles last year.

Wu also pleaded guilty today to conspiring to distribute methamphetamine and Ecstasy, as well as to charges of importing millions of counterfeit cigarettes.

Wu, who is being held without bond, is scheduled to be sentenced by United States District Judge Dale S. Fischer on July 31.

Operation Smoking Dragon, which was announced on August 18, resulted in four indictments in Los Angeles that name 30 defendants. The indictments allege that several individuals in California were importing counterfeit products, including $40 million worth of cigarettes that were manufactured in a foreign country, through the Los Angeles and Long Beach ports. An FBI undercover operation arranged the shipment of these counterfeit goods into California for the purpose of identifying the entire criminal enterprise. FBI undercover agents posed as underworld criminals who could move these counterfeit products into the United States and Canada. The defendants, believing they were dealing with other criminals, paid for some of the illegal shipments with counterfeit cigarettes and narcotics.

Operation Smoking Dragon was an investigation run by the Federal Bureau of Investigation, which received substantial assistance from U.S. Immigration and Customs Enforcement and the United States Secret Service.

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Release No. 06-044

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