Illegal Agents of the PRC Government Charged for PRC-Directed Bribery Scheme

John Chen and Lin Feng Allegedly Furthered the PRC Government’s Transnational Repression Campaign Against the Falun Gong by Bribing a Purported IRS Official A federal court in the Southern District of New York today unsealed a complaint charging two individuals with acting and conspiring to act in the United States as unregistered agents of the People’s Republic of China (PRC), conspiring to bribe and bribing a public official, and conspiracy to commit money laundering. According to the complaint, John Chen, aka Chen Jun, 70, a Los Angeles resident and former citizen of the PRC, and Lin Feng, a Los Angeles resident and PRC citizen, allegedly participated in a PRC Government-directed scheme targeting U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC. Chen and Feng were arrested today in the Central District of California. “The Chinese government has yet again attempted, and failed, to target critics of the PRC here in the United States,” said Attorney General Merrick B. Garland. “We allege the defendants in this case attempted to bribe someone they thought was an IRS agent in order to further the Chinese government’s campaign of transnational repression in the United States. But the individual they attempted to bribe was in fact an undercover law enforcement agent, and both defendants were arrested this morning. The Justice Department will continue to investigate, disrupt, and prosecute efforts by the PRC government to silence its critics and extend the reaches of its regime onto U.S. soil. We will never stop working to defend the rights to which every person in the United States is entitled.” “The Department of Justice continues to expose the Chinese government’s brazen attempts to perpetrate transnational repression, this time through attempted bribery,” said Deputy Attorney General Lisa O. Monaco. “As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.” “China’s government has once again shown its disregard for the rule of law and international norms,” said FBI Director Christopher Wray. “The FBI will not tolerate CCP repression — its efforts to threaten, harass, and intimidate people — here in the United States. We will continue to confront the Chinese government’s efforts to violate our laws and repress the rights and freedoms of people in our country.”“No other nation poses as severe a threat to the democratic values of the United States as the government of the People’s Republic of China,” said FBI Deputy Director Paul Abbate. “The FBI will not stand by as the PRC attempts to weaponize our institutions and programs and attack the rights of those on U.S. soil. Any attempt to repress or harass individuals runs directly counter to the ideals our nation was founded upon, and it simply will not be tolerated. The FBI and our partners remain committed to confronting the illegal conduct of the PRC government that threatens our national security and freedom.”

“John Chen and Lin Feng allegedly waged a campaign at the behest of the Government of the People’s Republic of China to influence a U.S. Government official in order to further the PRC Government’s repression of practitioners of Falun Gong,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts to manipulate and use the arms of the U.S. Government to carry out the PRC Government’s autocratic aims are as shocking as they are insidious. My office will work vigorously to protect against malign foreign influences.” The complaint alleges that from at least approximately January 2023 to May 2023, Chen and Feng worked inside the United States at the direction of the PRC government, including an identified PRC government official (PRC Official-1), to further the PRC government’s campaign to repress and harass Falun Gong practitioners. The PRC Government has designated the Falun Gong as one of the “five poisons,” or one of the top five threats to its rule. In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC government, including imprisonment and torture. As part of the PRC government’s campaign against the Falun Gong, Chen and Feng allegedly engaged in a PRC government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (Entity-1). After Chen filed a defective whistleblower complaint with the IRS (the Chen Whistleblower Complaint), Chen and Feng paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was in fact an undercover officer (Agent-1), in exchange for Agent-1’s assistance in advancing the complaint. Neither Chen nor Feng notified the Attorney General that they were acting as agents of the PRC government in the United States. In the course of the scheme, Chen, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC government, was to carry out the PRC government’s aim of “toppl[ing] . . . the Falun Gong.” During a call intercepted pursuant to a judicially authorized wiretap, Chen and Feng discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if Chen and Feng’s meetings to bribe Agent-1 did not go as planned. Chen and Feng also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong. As part of this scheme, Chen and Feng allegedly met with Agent-1 in Newburgh, New York, on May 14. During the meeting, Chen gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment. Chen further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful. On May 18, Feng paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. Chen allegedly obtained funding from the PRC government to make bribe payments during his trips to the PRC in the course of the scheme. Chen and Feng are each charged with (1) one count of conspiring to act as an agent of a foreign government without notifying the Attorney General and to bribe a public official, which carries a maximum sentence of five years in prison; (2) one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; (3) one count of bribing a public official, which carries a maximum sentence of 15 years in prison; and (4) one count of conspiring to commit international money laundering, which carries a maximum sentence of 20 years in prison. The FBI New York and Los Angeles Field Offices and Counterintelligence Division are investigating the case with valuable assistance provided by the Treasury Inspector General for Tax Administration (TIGTA). Assistant U.S. Attorneys Shiva H. Logarajah, Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock for the Southern District of New York and Trial Attorney Christina A. Clark of the Counterintelligence and Export Control Section are prosecuting the case. The charges in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven Source-FBI

Bribery-Former FBI Agent Docked

Former FBI Special Agent Found Guilty of Accepting Bribes Paid by Lawyer Linked to Armenian Organized Crime Figure LOS ANGELES – A Bay Area man and former FBI special agent was found guilty today by a federal jury of conspiring to accept at least $150,000 in cash bribes and other items of value in exchange for providing sensitive law enforcement information to a corrupt lawyer with ties to Armenian organized crime. Babak Broumand, 56, of Lafayette, California, was found guilty of one count of conspiracy, two counts of bribery of a public official, and one count of monetary transactions in property derived from specified unlawful activity. United States District Judge R. Gary Klausner scheduled a January 30, 2023 sentencing hearing, at which time Broumand will face statutory maximum sentences of 15 years in federal prison for each bribery count, 10 years in federal prison for each unlawful monetary transactions count, and five years in federal prison for the conspiracy count. Judge Klausner ordered Broumand remanded into federal custody. Broumand, an FBI special agent from January 1999 until shortly after search warrants were served on his home and businesses in 2018, was responsible for national security investigations and was assigned to the FBI Field Office in San Francisco. According to evidence presented at his 11-day trial, from January 2015 to December 2018, Broumand accepted cash, checks, private jet flights, a Ducati motorcycle, hotel stays, escorts, meals, and other items of value from an organized crime-linked lawyer – identified in court papers as “E.S” and each man acted to conceal the true nature of their corrupt relationship. In return for the bribe payments and other items of value, Broumand conducted law enforcement database inquiries and used those inquiries to help E.S. and his associates avoid prosecution and law enforcement monitoring. Specifically, Broumand informed E.S. whether a particular person or entity was under criminal investigation by stating that E.S. should “stay away” from that person or that they were “OK.” To conceal the nature of their corrupt relationship, Broumand made it falsely appear that E.S. was working as an FBI source. Broumand wrote reports after the fact to make it falsely appear that he conducted legitimate law enforcement database inquiries. In exchange for the illegal inquiries, E.S. paid Broumand at least $150,000 in cash and check bribes, including a Ducati motorcycle and accessories valued at more than $36,000. The bribes were deposited into the accounts for Love Bugs LLC, a Lafayette-based lice-removal hair salon business that Broumand and his wife started in 2007. Soon after the bribery scheme began, E.S. asked Broumand to query the FBI database for Levon Termendzhyan, an Armenian organized crime figure for whom E.S. had worked. The database search “rang all the bells” and revealed an FBI investigation in Los Angeles, according to court documents, which note that Broumand accessed the FBI case file on Termendzhyan repeatedly in January 2015. Broumand also allegedly accessed the Termendzhyan FBI case file in May 2016. Termendzhyan, a.k.a. “Lev Aslan Dermen,” was found guilty in March 2020 in federal court in Utah on criminal charges related to a $1 billion renewable fuel tax credit fraud scheme. He awaits sentencing. In December 2015, at E.S.’s request, Broumand searched a confidential FBI database for information about Sam Sarkis Solakyan, a medical imaging companies CEO, and later warned E.S. to “stay away” from Solakyan, who was “trouble,” meaning that Solakyan was under law enforcement investigation. Solakyan eventually was charged, tried, convicted and sentenced to five years in federal prison for running a scheme that submitted more than $250 million fraudulent claims through California’s workers compensation system. In May 2016, Broumand interfered with an FBI investigation into Felix Cisneros Jr., a corrupt special agent with Homeland Security Investigations who also had ties to Termendzhyan. Cisneros was convicted at trial in two different cases. The first trial, in 2018, resulted from Cisneros’s corrupt acts for Termendzhyan. The second trial, earlier this year, resulted from Cisneros’ corrupt acts for E.S. Cisneros is scheduled for sentencing on October 17. “Ensuring public confidence in those who investigate and enforce the law is paramount,” said United States Attorney Martin Estrada. “By taking bribes and gifts from a person he knew was linked to organized crime, Mr. Broumand breached the public trust placed in him and violated his oath of office, something which simply cannot be tolerated. The FBI’s agents and staff work tirelessly every day to keep us safe, and I am proud that they partnered with our Office to ferret out this corruption.” “The conviction of Mr. Broumand, a veteran FBI agent who chose greed over integrity and turned his back on the oath he swore to uphold, is proof that the FBI will root out corruption of any kind, to include veteran agents within its ranks,” said Don Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “This prosecution was the result of hard work by multiple partner agencies to work through the painful truth of having to investigate one of its own.” “Broumand conspired with the very types of criminals he was trusted to investigate. Today’s guilty verdict sends a clear message that no one is above the law, and any Department of Justice employee who participates in these types of schemes will be brought to justice,” said Zachary Shroyer, Special Agent in Charge of the Department of Justice Office of the Inspector General Los Angeles Field Office. “All of us in law enforcement are held to a higher standard and this is no exception,” stated IRS Criminal Investigation Oakland Field Office Special Agent in Charge Mark H. Pearson. “The American public places high expectations on law enforcement to uphold and defend the law. While today is a blemish in our community as Babak Broumand, a former FBI Agent, was found guilty for conspiring, bribery, and money laundering; I want to emphasize and highlight the exceptional professionalism, integrity and dedication demonstrated by the Federal Bureau of Investigation special agents, the Office of Inspector General, DOJ, the United States Attorney’s Office – CDCA, and the Internal Revenue Service-Criminal Investigation, for their commitment to upholding the law and seeing that justice is sought in all cases regardless of a person’s affiliation. I want to thank our partners for entrusting us with this investigation, and hope that the American public sees our efforts as an example of what the good men and women in law enforcement represent.” The jury today also found Broumand not guilty of one count of bribery of a public official and one count of monetary transactions in property derived from specified unlawful activity. The FBI, the United States Department of Justice Office of the Inspector General, and IRS Criminal Investigation investigated this matter and were assisted at trial by the Department of Homeland Security, Office of the Inspector General. Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section and Assistant United States Attorneys Michael J. Morse and Juan M. Rodríguez of the General Crimes Section are prosecuting this case. Source-FBI

Consultant Pleads Guilty to Providing Bribes to Public Officials to Benefit Clients

CHICAGO — A consultant pleaded guilty in federal court today to offering and providing bribes to public officials in an effort to benefit his clients. ROBERTO CALDERO, 69, of Chicago, pleaded guilty to one count of wire fraud. The conviction is punishable by up to 20 years in federal prison. U.S. District Judge Steven C. Seeger set sentencing for Dec. 15, 2022. The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Ashley T. Johnson, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI. The Chicago Public Schools Office of Inspector General participated in the investigation. The government is represented by Assistant U.S. Attorney Michelle Kramer. Caldero admitted in a plea agreement that in 2016 he offered and arranged for bribes to be provided to a City of Chicago alderman and a Chicago Public Schools employee in exchange for them taking official actions to benefit Caldero’s clients, who were seeking a custodial services contract at CPS, an honorary street name designation in Chicago, and the renaming of a parcel of property believed to be a Chicago Park District park. The benefits Caldero offered the CPS employee included the prospect of future employment, champagne, discounted event space for a family event, and admission to an annual benefit for a museum. To influence the alderman, Caldero arranged for campaign contributions to be made to political organizations affiliated with the alderman or his ward. Unbeknownst to Caldero, the alderman was cooperating with the FBI. Source-FBI