Former CBP Officer Pleads Guilty to Federal Charges for Running Illegal Firearms Business, Tax Evasion

Los Angeles–A former U.S. Customs and Border Protection watch commander at the Long Beach Seaport pleaded guilty today to federal criminal charges for running an illegal gun-selling business, unlawfully possessing more than 40 machine guns and other prohibited firearms, failing to disclose his foreign financial interests and contacts in China in order to obtain a secret-level security clearance, and cheating on his federal income taxes.

Wei Xu, 56, of Santa Fe Springs, pleaded guilty to four felonies: unlawfully engaging in the business of dealing in firearms, unlawfully possessing unregistered firearms, making materially false statements to a federal agency, and tax evasion.

United States District Judge R. Gary Klausner has scheduled a January 14, 2020 sentencing hearing, where Xu will face a statutory maximum sentence of 25 years in federal prison. Xu has been in federal custody since his arrest on February 5.

Xu admitted in his plea agreement and in open court today, that he sold at least 99 firearms without the required federal license between the late 1990s and his arrest. To increase the profit margin of his unlawful firearms selling business, Xu exploited his status as a law enforcement officer to purchase and then transfer “off-roster” handguns that cannot be sold to the general public by a federal firearms license (FFL) dealer, according to the plea agreement.

Xu also sold or transferred firearms within days or weeks from the date he purchased them and operated several accounts on Internet marketplaces to advertise his firearm business, according to court documents.

According to plea documents and Xu’s admissions in court today, in July and August 2018, Xu sold four firearms to an undercover agent posing as a buyer, and Xu unlawfully sold three of the firearms out of the trunk of his car. The firearms included an “off-roster” pistol, high-capacity magazines, and a short-barreled rifle, the plea agreement states.

A search of Xu’s residence on February 5 recovered more than 250 firearms, including 41 fully-automatic firearms or machineguns and two additional short-barreled rifles – all of which never were registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) as required by federal law.

Xu also admitted that he made materially false statements on three questionnaires submitted to the Office of Personnel Management (OPM) to obtain a secret-level security clearance. OPM is a federal agency that oversees applications for security clearances for federal government employees.

Specifically, Xu maintained foreign financial interests and had nearly weekly contacts with his business associates in China as part of his employment as an accounts manager for a China-based auto parts import company. Xu collected a commission for his work and remitted the profit to his China-based business partners. But on his security clearance questionnaires in 2003, 2011 and 2015, Xu falsely denied maintaining close and continuing contacts with foreign nationals, denied having a foreign financial interest, and denied having a business venture with a foreign national.

Finally, Xu admitted in his plea agreement that he willfully evaded the payment federal income tax from 2005 to 2017 by setting up Trans Pacific Group, Inc. Xu used this Florida-incorporated sham company as a means to claim fictional ordinary business losses to offset his ordinary income and fraudulently evade tax due to the Internal Revenue Service.

NO COMMENTS

LEAVE A REPLY