Author: MIL-OSI Publisher

Source: United States Department of Justice Criminal Division

An illegal alien from China was sentenced yesterday to 96 months in prison for illegally exporting firearms, ammunition, and other military items to North Korea by concealing them inside shipping containers that departed from the Port of Long Beach, and for committing this crime at the direction of North Korean government officials, who wired him approximately $2 million for his efforts.     

Shenghua Wen, 42, of Ontario, was sentenced by U.S. District Court Judge Stephen V. Wilson for the Central District of California

Wen, who has been in federal custody since December 2024, pleaded guilty on June 9 to one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and one count of acting as an illegal agent of a foreign government.

Wen is a citizen of the People’s Republic of China who entered the United States in 2012 on a student visa and remained in the U.S. illegally after his student visa expired in December 2013.

Prior to entering the United States, Wen met with officials from North Korea’s government at a North Korean embassy in China. These government officials directed Wen to procure goods on behalf of North Korea.

In 2022, two North Korean government officials contacted Wen through an online messaging platform and instructed him to buy and smuggle firearms and other goods — including sensitive technology — from the United States to North Korea via China.

In 2023, at the direction of North Korean government officials, Wen shipped at least three containers of firearms out of the Port of Long Beach to China en route to their ultimate destination in North Korea. Wen took steps to conceal that he was illegally shipping firearms to North Korea by, among other things, filing false export information regarding the contents of the containers.

In May 2023, Wen purchased a firearms business in Houston, paid for with money sent through intermediaries by one of Wen’s North Korean contacts. Wen purchased many of the firearms he sent to North Korea in Texas and drove the firearms from Texas to California, where he arranged for them to be shipped.

In December 2023, one of Wen’s weapons shipments — which falsely reported to U.S. officials that it contained a refrigerator — left the Port of Long Beach and arrived in Hong Kong in January 2024. This weapons shipment was later transported from Hong Kong to Nampo, North Korea.

In September 2024, Wen — once again acting at the direction of North Korean officials — bought approximately 60,000 rounds of 9mm ammunition that he intended to ship to North Korea.

In furtherance of the conspiracy and at the direction of North Korean officials, Wen also obtained sensitive technology that he intended to send to North Korea. This technology included a chemical threat identification device and a handheld broadband receiver that detects known, unknown, illegal, disruptive or interfering transmissions.

Wen also acquired or offered to acquire a civilian airplane engine and a thermal imaging system that could be mounted on a drone, helicopter, or other aircraft, and could be used for reconnaissance and target identification.

During the scheme, North Korean officials wired approximately $2 million to Wen to procure firearms and other goods for their government.

Wen admitted in his plea agreement that at all relevant times he knew that it was illegal to ship firearms, ammunition, and sensitive technology to North Korea. He also admitted to never having the required licenses to export ammunition, firearms, and the above-described devices to North Korea. He further admitted to acting at the direction of North Korean government officials and that he had not provided notification to the Attorney General of the United States that he was acting in the United States at the direction and control of North Korea as required by law.

The FBI; Homeland Security Investigations; DCIS; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Department of Commerce Bureau of Industry and Security investigated this matter.

Assistant U.S. Attorney Sarah E. Gerdes for the Central District of California’s Terrorism and Export Crimes Section and Trial Attorney Ahmed Almudallal of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Source: United States Department of Justice Criminal Division

Defendant Facilitated Russia’s Acquisition of Millions of Dollars of U.S.-Made Dual-Use Electronics, as well as Military-Grade Ammunition

Source: United States Department of Justice Criminal Division

A West Virginia man was sentenced today to 18 months in prison for his willful failure to pay over employment taxes on behalf of his business.

The following is according to court documents and statements made in court: Dean E. Dawson, of Hurricane, owned and operated Real Property Consulting Group LLC (RPC Group), a Hurricane, West Virginia, real estate appraisal business. Dawson was responsible for withholding Social Security, Medicare, and federal income taxes from RPC Group’s employees and paying over those funds to the IRS. The timely payment of these taxes is critical to the functioning of the U.S. government because, for example, they are the primary source of funding for Social Security and Medicare. The federal income taxes that are withheld from employees’ wages also account for a significant portion of all federal income taxes collected each year.

Between 2015 and 2022, Dawson did not pay to the IRS the taxes withheld from his employees’ paychecks. He also used RPC Group’s business accounts to pay for personal expenses, including personal credit cards and his wife’s home mortgage. He also issued checks to his wife from RPC Group even though she was not an employee of the business. In addition, from 2018 to 2023, Dawson did not file personal tax returns or pay income taxes. 

In total, Dawson caused a tax loss to the IRS of about $525,000.

In addition to his prison sentence, U.S. District Court Judge Robert C. Chambers for the Southern District of West Virginia ordered Dawson to serve three years of supervised release and to pay $430,527.56 plus interest in restitution to the United States.

IRS Criminal Investigation investigated the case.

Trial Attorney Rebecca A. Caruso of the Tax Division and Assistant U.S. Attorney Jonathan Storage for the Southern District of West Virginia prosecuted the case.

Source: United States Department of Justice Criminal Division

A Florida man pleaded guilty today before Magistrate Judge Kyle C. Dudek for the Middle District of Florida to conspiring to defraud the United States by operating an off-the-books payroll scheme. The plea must be accepted by a U.S. district court judge.

The following is according to court documents and statements made in court: Alexis Garcia conspired with others to operate an illegal, off-the-books cash payroll system for construction workers to avoid paying employment taxes to the IRS and to defraud workers’ compensation insurance companies. Between 2017 and 2019, Garcia managed and directed the operations of Tape Drywall Services Inc., located in Naples, Florida. Contractors entered into agreements with Tape Drywall to provide workers for various construction contracts and provided checks in the name of Tape Drywall for payment. Garcia and his co-conspirator would cash the checks and retain a small percentage as a fee. Garcia and his co-conspirator provided cash to the foremen who used the cash to pay the workers. In total, Garcia and his co-conspirator cashed over 3,600 checks totaling approximately $28 million. 

Garcia and his co-conspirator did not report the wages to the IRS and did not withhold Social Security, Medicare, and federal income taxes from those wage and pay them over to the IRS, as required by law. As a result, Garcia caused a loss to the United States of more than $4.2 million.

In addition, Garcia and his co-conspirator defrauded workers’ compensation companies by substantially misrepresenting the amount of Tape Drywall’s payroll. The misrepresentations resulted in substantially lower insurance payments.

The timely payment of these taxes is critical to the functioning of the U.S. government because, for example, they are the primary source of funding for Social Security and Medicare. The federal income taxes that are withheld from employees’ wages also account for a significant portion of all federal income taxes collected each year. 

Garcia is scheduled to be sentenced at a later date. He faces a maximum penalty of five years in prison, as well as a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation is investigating the case, with assistance from Homeland Security Investigations.

Senior Litigation Counsel Michael C. Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Yolande G. Viacava for the Middle District of Florida are prosecuting the case.