Business Owner to Lose U.S. Citizenship for Illegal Behavior

Chinese immigrant pleads guilty to money laundering charges.

By EGP Staff Report

An investigation into “Black Market Peso Exchange” schemes in the Fashion District is going to cost the owner of an import-export business his U.S. citizenship, the U.S. Attorney has announced.

Xilin Chen (???), 55, of Temple City, pleaded guilty May 29 to three felony counts – knowingly passing false documents through a customhouse of the United States, conspiracy to launder money, and unlawful procurement of citizenship in that are used by international drug cartels to launder and send narcotics proceeds out of the United States.

Chen, owner of Yili Underwear and Gayima Underwear pleaded guilty in United States District Court as part of a plea deal that requires him to forfeit hundreds of thousands of dollars in assets and will result in the loss of his United States citizenship, according to authorities.

In court last week, Xilin Chen admitted receiving large amounts of cash at his business that he had good reason to believe was from illegal activity, specifically drug trafficking.

Black Market Peso Exchange (BMPE) schemes — used by international drug cartels to launder and send narcotics proceeds out of the United States — is a type of trade-based money laundering, according to the U.S. attorney.

The schemes are often used by Mexico-based drug cartels as a way to collect money from their U.S. drug sales and avoid the risk of smuggling large amounts of U.S. currency across the Mexican border and without having to wire the funds through financial institutions, both of which carry the threat of authorities detecting the illegal source of the money.

Typically, operatives for the cartels will identify a business they can buy goods from for cash —usually large amounts of money from illegal drug sales — and then ship the goods to another country where the merchandise is sold and funds generated is turned over to the cartel.

Chen plead guilty to charges that he lied on U.S. custom forms about the value of merchandise imported from China, claiming it was worth $86,635, even though the true value of the clothing was $175,535, in order to not pay the proper duty owed on the merchandise. Some of the money generated from the illegal activity was deposited in U.S. banks and then wire transferred to China to pay for merchandise, which the government said consitutes money laundering.

He also admitted to three times accepting bulk cash as payment for clothing from an undercover agent posing as someone using the proceeds of narcotics trafficking to purchase merchandise.

Chen admitted he was aware, or should have been aware, of the high probability that he was accepting money derived from narcotics trafficking, but he “deliberately avoided asking questions or confirming the truth,” according to the plea agreement.

He also pleaded guilty to illegally procuring citizenship in 2012 when he declared he was not involved in criminal activity, even though he was involved in customs fraud and money laundering.

Xilin Chen’s son – Chuang Feng Chen (aka “Tom” and ???), 25, also of Temple City – also pleaded guilty May 29 to conspiracy to pass false documents through a customhouse of the United States.

As part of the plea agreement, prosecutors have asked the judge in the case to dismiss charges against Aixia Chen, Xilin Chen’s daughter.

The Chens have agreed to forfeit to the United States proceeds from the sales of the building that houses the underwear company, two residences in Temple City and more than $435,000 that was seized during the execution of search warrants and seizure warrants last fall.

Sentencing is scheduled for Aug. 24.

http://egpnews.com/2015/06/business-...egal-behavior/