CANADIAN ANTIQUE DEALER CHARGED WITH CONSPIRING TO SMUGGLE WILDLIFE PRODUCTS LIKE IVORY, RHINOCEROS HORN

FROM:  U.S. JUSTICE DEPARTMENT

Tuesday, July 29, 2014

Canadian Antique Dealer Charged with Trafficking Wildlife

Antique Company President Charged with Smuggling Wildlife Worth More Than $500,000

Canadian antiques dealer Xiao Ju Guan, aka Tony Guan, 39, was indicted by a federal grand jury in Manhattan today for conspiring to smuggle wildlife, including rhinoceros horn, elephant ivory and coral, announced Acting Assistant Attorney General Sam Hirsch for the Environment and Natural Resources Division of the Department of Justice, U.S. Attorney Preet Bharara for the Southern District of New York and Director Dan Ashe of the U.S. Fish & Wildlife Service (FWS).

Guan, the president and owner of an antiques business in Richmond, British Columbia, was arrested on March 29, 2014, after flying from Vancouver to New York and purchasing two endangered black rhinoceros horns from undercover special agents with the U.S. Fish & Wildlife Service at a storage facility in the Bronx.   After purchasing the horns in a storage pod, Guan had the undercover agents drive him and a female accomplice acting as his interpreter to a nearby express mail store where he mailed the horns to an address in Point Roberts, Washington, less than a mile from the Canadian border and 17 miles from his business.   Guan labeled the box of black rhino horns as containing “handicrafts” worth $200, even though he had just paid $45,000 for them.   Guan indicated that he had people who could drive the horns across the border and that he had done so many times before.

Guan and his co-conspirators allegedly smuggled more than $500,000 of rhino horns and sculptures made from elephant ivory and coral from various U.S. auction houses to Canada by the same method or by having packages mailed directly to Canada with false paperwork and without the required declaration or permits.   One part of the criminal scheme was to falsely describe the wildlife in order to conceal Guan’s wildlife smuggling.   In the case of a rhino horn purchased in Florida, the Customs paperwork claimed it was a “Wooden Horn” worth $200.

At the same time that Guan was being arrested in New York, wildlife enforcement officers with Environment Canada executed a search warrant at Guan’s antique business in Canada.   Environment Canada and Justice Canada are working cooperatively with U.S. investigators and prosecutors.   The Guan case is part of “Operation Crash,” a U.S. Fish & Wildlife and Justice Department crackdown on illegal trafficking in rhinoceros horns.

“Illegal wildlife trafficking is a multibillion-dollar business that must be stopped,” said Acting Assistant Attorney General Hirsch.  “The Justice Department is working vigorously to uphold the laws designed to protect rhinos and elephants and other threatened species from extinction and is working alongside our international partners to bring black-market wildlife traders to justice.   We are also very grateful here for the assistance from Canadian authorities.”

“ There is an ever-expanding black market for objects made from endangered species that fuels the devastating and senseless slaughter of noble animals,” said U.S. Attorney Bharara.  “The charges levied today are designed to deal a heavy blow to those that are deliberately profiting from the trade in rare and endangered species. ”

“As this case illustrates, the United States plays a key role in the illegal wildlife trade – often as the source of, or transit country for, poached and smuggled wildlife products headed elsewhere in the world,” said Director Ashe. “This makes coordination vital with our international partners as we work together to halt the slaughter of rhinos, elephants and many other imperiled species.   We have a long history of collaboration with Environment Canada on wildlife trafficking and other issues, and we appreciate the invaluable assistance they’ve provided in this case.”

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth.  They have no known predators other than humans.  All species of rhinoceros are protected under U.S. and international law.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.

Operation Crash is a continuing investigation by the Department of the Interior’s Fish and Wildlife Service (FWS), in coordination with the Department of Justice.   A “crash” is the term for a herd of rhinoceros.  Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.  The Guan case was investigated by FWS, the U.S. Attorney’s Office Complex Frauds Unit and the Justice Department’s Environmental Crimes Section with assistance from Environment Canada’s Wildlife Enforcement Directorate.   Assistant U.S. Attorney Janis M. Echenberg and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section are in charge of the prosecution.

An indictment is an allegation based upon a finding of probable cause.   A defendant is presumed innocent until convicted.   If convicted, Guan faces up to five years in prison for the conspiracy and wildlife charges and up to ten years in prison for the crime of smuggling.   Guan could be fined up to $200,000 per count or up to twice the gross gain from the criminal conduct.

COUNTERFEIT DRUG SMUGGLER SENTENCED TO 41 MONTHS IN PRISON

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, July 17, 2014

Illinois Man Sentenced for Smuggling Counterfeit Goods and Drugs into the U.S.

An Illinois man, who previously pleaded guilty to trafficking in counterfeit goods and introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act, was sentenced today to serve 41 months in prison.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson for the Southern District of Texas and Special Agent in Charge Brian Moskowitz of Homeland Security Investigations (HSI) made the announcement.

Fayez Al-Jabri, 45, of Chicago, Illinois, was sentenced by U.S. District Court Judge Nancy F. Atlas in the Southern District of Texas.  In addition to his prison term, Al-Jabri will serve three years of supervised release and ordered to pay $15,066 in restitution and forfeit $47,750.

According to court documents, Al-Jabri conspired to smuggle more than 26,000 counterfeit Viagra tablets from China into the United States for further distribution.   As part of that conspiracy, between July 2011 and October 2012, Al-Jabri and his co-conspirator shipped thousands of counterfeit Viagra tablets from Chicago to an undercover agent in Houston, Texas.  HSI submitted all of the tablets seized during the investigation to both the U.S. Food and Drug Administration (FDA) and Pfizer, Viagra’s manufacturer, for analysis.  Both the FDA and Pfizer identified the tablets as counterfeit and misbranded Viagra.

Al-Jabri and Jamal Khattab, 49, of Katy, Texas, were indicted on Aug. 22, 2012.  On March 21, 2014, Al-Jabri pleaded guilty to one count of conspiracy to traffic in counterfeit goods, to introduce misbranded prescription drugs into interstate commerce and to import such goods contrary to U.S. law; one count of trafficking in counterfeit goods; and one count of introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act.   Khattab pleaded guilty on Dec. 3, 2013, to the same charges, and his sentencing is scheduled for Aug. 14, 2014.

This matter was investigated by HSI, the FDA’s Office of Criminal Investigations, the Department of State - Diplomatic Security Service and police departments in Houston and Chicago.  The case is being prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Kebharu Smith and Jennifer Lowery of the Southern District of Texas.

INTERNATIONAL RHINO HORN, ELEPHANT IVORY SMUGGLER SENTENCE TO 70 MONTHS IN PRISON

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, May 28, 2014

Ringleader of International Rhino Smuggling Conspiracy Sentenced in New Jersey to 70 Months in Prison for Wildlife Trafficking Crimes

Zhifei Li, the owner of an antique business in China, was sentenced today to serve 70 months in prison for heading an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.

The sentence – one of the longest sentences to be imposed in the United States for a wildlife smuggling offense – was announced by Sam Hirsch, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice; Paul J. Fishman, U.S. Attorney for the District of New Jersey; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).

Li, 30, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, previously pleaded guilty before U.S. District Judge Esther Salas to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents.  Judge Salas also imposed the sentence today in Newark federal court.

“Li was the ringleader of a criminal enterprise that spanned the globe and profited from an illegal trade that is pushing endangered animals toward extinction,” said Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division.  “As this case clearly demonstrates, rhino trafficking is increasingly organized, well financed, and a threat to the rule of law.  The United States is resolved to bring wildlife traffickers to justice.”

“The multibillion-dollar illegal wildlife market is supplied by animal poaching of unthinkable brutality and fed by those willing to profit from such cruelty,” said U.S. Attorney Fishman.  “Zhifei Li appropriately faces 70 months in prison for orchestrating schemes worth millions of dollars and for violating laws meant to protect the most vulnerable species.”

“Wild populations of rhinos are being slaughtered at appalling rates due to the greed and indifference of criminals like Li and his accomplices,” said U.S. Fish and Wildlife Service Director Dan Ashe. “The sentence handed down today serves notice to other organized trafficking and poaching rings that their crimes will not go unpunished.  We will relentlessly work across the U.S. government and with the international law enforcement community to destroy these networks, while strengthening protections for rhinos in the wild and reducing demand for horn in consumer countries.”

Li was arrested in Florida in January 2013, shortly after arriving in the country, on federal charges brought under seal in New Jersey.  Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show.  Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.

In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong.  One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to 37 months in prison on Dec. 5, 2013, in the Southern District of New York .   Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating prices, directing how to smuggle the items out of the United States, and getting the assistance of additional collaborators in Hong Kong to receive the goods and smuggle them to him in mainland China.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth.  They have no known predators other than humans. All species of rhinoceros are protected under United States and international law.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.

In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin).   In China, there is a centuries old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn.  Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors.  The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.

In addition to the prison term, Judge Salas ordered Li to serve two years of supervised release and to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Various ivory objects seized by the USFWS as part of the investigation have also been surrendered.

The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section.

The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

NARWHAL TUSK TRAFFICKER CONVICTED FOR ROLE IN ILLEGAL IMPORTATION CASE

FROM:  JUSTICE DEPARTMENT 
Friday, February 14, 2014
Narwhal Tusk Trafficker Convicted of Conspiracy and Money Laundering

Andrew L. Zarauskas, 60, of Union, N.J., was found guilty today by a federal jury in Bangor, Maine, of illegally trafficking and smuggling narwhal tusks, and associated money laundering crimes, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division .

The defendant was convicted of conspiracy, money laundering conspiracy, smuggling, and money laundering violations for buying narwhal tusks knowing the tusks had been illegally imported into the United States from Canada, as well as selling or attempting to sell the tusks after their illegal importation.

“The Justice Department takes seriously our responsibility to prosecute those who engage in the illegal trade of any protected wildlife species,” said Acting Assistant Attorney General Dreher.  “Zarauskas and his co-conspirators flouted U.S. law and international agreements that protect marine mammals such as the narwhal for their own personal financial benefit.  The Justice Department will continue to investigate and prosecute those engaged in this insidious trade in order to protect species for future generations to enjoy.”

"The success of this investigation was a direct result of the uncompromising cooperation between special agents of the U.S. Fish and Wildlife Service, NOAA and Environment Canada. It is this type of international teamwork which exemplifies the ongoing fight against illegal wildlife trafficking."  said William C. Woody, Assistant Director for Law Enforcement for the U.S. Fish and Wildlife Service.

“This investigation is an example of excellent coordinated efforts between NOAA, Office of Law Enforcement (OLE) and the U.S. Fish and Wildlife Service, Office of Law Enforcement” said Logan Gregory, Special Agent In Charge for NOAA.   The protection of Marine Mammals and enforcement of the Marine Mammal Protection Act is a high priority for OLE and we will continue to work with our enforcement partners and the Department of Justice to ensure compliance.”

From 2002 to 2008, Zarauskas knowingly purchased approximately 33 narwhal tusks that he knew were illegally imported into the United States in violation of federal law.  A narwhal is a medium-sized whale with an extremely long tusk that projects from its upper left jaw, often referred to as the unicorn of the sea.   As marine mammals narwhals are protected by the Marine Mammal Protection Act and are listed on Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).   It is illegal to import parts of marine mammals into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and the U.S. Fish and Wildlife Service.  Narwhal tusks are commonly collected for display purposes and can fetch large sums of money.

According to evidence presented at the trial, Zarauskas conspired with others, including persons located in Canada, to illegally import the protected tusks for re-sale in the United States and to launder the funds used to purchase the narwhal tusks by transporting, transmitting, or transferring checks and money orders from New Jersey to Canada, intending that the money be used for further illegal imports of narwhal tusks.

On Jan. 7, 2014, Jay G. Conrad, of Lakeland, Tenn., who had been charged in the same indictment, pleaded guilty to conspiring to illegally import and traffic narwhal tusks, conspiring to launder money, and illegally trafficking narwhal tusks.   On that same date, a plea agreement was also unsealed in which Eddie T. Dunn, of Eads, Tenn., pleaded guilty in the District of Alaska to conspiring to illegally traffic, and trafficking, narwhal tusks.

Throughout the conspiracy, Zarauskus and his co-conspirators made payments to the Canadian supplier for the narwhal tusks, by sending the payments to a mailing address in Bangor, Maine, or directly to the supplier in Canada.   The payments allowed the Canadian supplier to purchase and re-supply Zarauskus and Conrad with more narwhal tusks that they could then re-sell.   Conrad sold between $400,000 and $1 million worth of narwhal tusks and Dunn sold approximately $1.1 million worth of narwhal tusks as members of the conspiracy.

Earlier this week, President Obama announced the National Strategy for Combating Wildlife Trafficking, recognizing that record high demand for wildlife products, coupled with inadequate preventative measures and weak institutions has resulted in an explosion of illicit trade in recent years.   Like other forms of illicit trade, wildlife trafficking undermines security across nations.   While t he Department of Justice has long worked to protect threatened and endangered wildlife species through its enforcement of the Lacey Act and the Marine Mammal Protection Act, among other laws, the National Strategy identifies priority areas for increased interagency coordination, with the objectives of harnessing and strategically applying the full breadth of U.S. Government resources to end the pernicious trade in protected species both at home and abroad.

Zarauskus and Conrad are to be sentenced by U.S. District Court Judge John A. Woodcock in the District of Maine.   A sentencing date has not been set.   They each face a maximum of twenty years incarceration for their involvement in this narwhal tusk trafficking scheme, and a fine of up to $250,000. Dunn is scheduled to be sentenced by U.S. District Judge Ralph R. Beistline in the District of Alaska on March 20, 2014, and may be imprisoned up to five years and fined $250,000. Co-defendant Gregory R. Logan is pending extradition from Canada to the District of Maine.

The case was investigated by agents from National Oceanic and Atmospheric Administration Office of Law Enforcement, the United States Fish and Wildlife Service Office of Law Enforcement and in coordination with Environmental Canada Wildlife Enforcement Division and the Department of Justice’s Office of International Affairs.  The case is being prosecuted by Trial Attorneys Todd S. Mikolop and James Nelson of the Justice Department’s Environmental Crimes Section.