Date: 01-29-2020

Case Style:

Case Number: 2:19-cr-00093-RGK

Judge:

Court: United States District Court for the Central District of California (Los Angeles County)

Plaintiff's Attorney: Annamartine Salick, Valerie L. Makarewicz and Brent A. Whittlesey

Defendant's Attorney:

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Description: Los Angeles, CA - The United States of America sued Wei Xu with operating an illegal gun selling business and other felonies.

A former U.S. Customs and Border Protection watch commander was ordered today to serve 31 months in federal prison for committing a series of crimes, including operating an illegal gun-selling business, possessing 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, 58, of Santa Fe Springs, was sentenced by United States District Judge R. Gary Klausner. Xu was sentenced after pleading guilty in July 2019 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.

When he pleaded guilty, Xu admitted that he sold at least 99 firearms without the required federal license in the 20 years prior to his arrest nearly one year ago. To increase the profits of his unlawful firearms 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 dealer.

According to court documents, 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 – which Xu provided information on how to convert to a fully automatic firearm.

A search of Xu’s residence on February 5, 2019 led to the recovery of more than 250 firearms, including 41 machine guns and two additional short-barreled rifles – all of which never were registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives 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 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 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 of federal income taxes for the years 2005 through 2017. Xu established a sham company that claimed fictional losses, which he used to offset his CBP income and fraudulently evade federal income taxes. In a sentencing memorandum filed with the court, prosecutors argued that Xu also failed to report income from a rental property and the profits of his unlicensed gun business.

“Mr. Xu betrayed his oath to uphold the laws of the United States solely to put more money in his pocket,” said United States Attorney Nick Hanna. “The scope of his corrupt conduct is wide-ranging – he endangered the public by selling off-roster firearms, and he lied to federal government officials to cover up his illegal activities and his connections to Chinese nationals. The prison sentence imposed today is the result of Mr. Xu’s conscious choices to take advance of his law enforcement position to generate profits for himself.”

“The goal of ATF’s illegal firearms trafficking enforcement efforts is to reduce violent crime by stemming the flow of firearms to prohibited individuals,” said Carlos A. Canino, the Special Agent in Charge of the Los Angeles Field Division of the Bureau of Alcohol, Firearms, Tobacco and Explosives (ATF). “At ATF we all stand committed to safeguarding lives by protecting the public from violent crime. Xu used his position as a federal law enforcement officer to do just the opposite. He bought firearms from gun dealers that the general public in California could not. He then repeatedly sold those firearms, putting more guns into our communities. He sadly was motivated by greed, as opposed to being motivated by his promise to enhance public safety. Bringing a case against a fellow federal law enforcement officer is never pleasant, but public safety is ATF’s first priority, and our commitment to justice is above everything.”

“As a law enforcement official, Xu was expected to set a good example and to live up to the high standards he was sworn to uphold,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Instead, he violated his oath, betrayed his colleagues and endangered the public he was hired to protect. The seamless relationship among the investigative agencies in this case led to the successful conclusion and significant sentence being announced today.”

“Wei Xu took advantage of his employment as a sworn law enforcement officer to orchestrate criminal activities ranging from illegal firearm sales to filing fraudulent tax returns,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation. “Xu’s actions were an insult to the men and women of law enforcement who work tirelessly to protect and serve the public. We were proud to work alongside our law enforcement partners to hold Xu accountable for his actions.”

In addition to the prison term, Judge Klausner ordered Xu to pay $128,407 in restitution to the Internal Revenue Service.

Xu, who was a CBP watch commander at the Los Angeles and Long Beach Seaport, has been in federal custody since his arrest in this case on February 5, 2019.

This matter was investigated by the FBI, the ATF, and IRS Criminal Investigation.

This case was prosecuted by Assistant United States Attorneys Annamartine Salick of the Terrorism and Export Crimes Section, Valerie L. Makarewicz of the Major Frauds Section, and Brent A. Whittlesey of the Asset Forfeiture Section.

Charges:

18:922(a)(1): Dealing Firearms Without a License
(1)
18:1001(a) FALSE STATEMENTS TO A FEDERAL AGENCY
(1s)
26:5861(e): Unlawful Transfer of an unregistered Firearm (Short-Barreled Rifle)
(2)
18:922(a)(1)(A) DEALING FIREARMS WITHOUT A LICENSE
(2s)
26:5861(d): Unlawful Possession of an Unregistered Firearm (Short-Barreled Rifle)
(3-4)
26:5861(d) POSSESSION OF UNREGISTERED FIREARMS
(3s)
26:7201 WILLFUL ATTEMPT TO EVADE OR DEFEAT TAX
(4s)

Outcome: Former Officer with U.S. Customs and Border Protection Sentenced to Over 2½ Years in Federal Prison for Illegal Gun Sales and Tax Evasion

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