Former CBP Officer Pleads Guilty to Running Illegal Firearms Business

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By on July 18, 2019 in Court Cases with 0 Comments
Judge's gavel sitting on a desk with a pair of handcuffs in the background

A former U.S. Customs and Border Protection watch commander at the Long Beach Seaport pleaded guilty this week 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.

According to his plea agreement, Xu admitted that he sold at least 99 firearms without the required federal license between the late 1990s and his arrest. To increase the profit margin, 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.

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

His plea documents further showed that 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.

During one such sale, the affidavit stated that Xu showed up in a Maserati, and when the undercover agent commented on the car, Xu said, “I’m like you, playboy.”

On February 5, a search conducted at his home recovered more than 250 firearms, including 41 fully-automatic firearms or machine guns 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.

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 paying federal income tax from 2005 to 2017 by setting up Trans Pacific Group, Inc. This was a Florida-incorporated sham company he used as a means to claim fictional ordinary business losses to offset his ordinary income and fraudulently evade tax due to the Internal Revenue Service.

“Mr. Xu’s public life as a federal officer masked his private greed and disrespect for the law, which he demonstrated through illegal weapons sales, tax evasion, and lying about contacts with foreign nationals,” said United States Attorney Nick Hanna. “Public officials promise to act with integrity when they take an oath of office, and we will zealously prosecute those who mock the laws they have sworn to uphold.”

A sentencing hearing has been scheduled for January 14, 2020 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.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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