Long Island Man Pleads Guilty to Trafficking in Rhinoceros Horns

Fengyi Zhou, a resident of Syosset, New York, and the owner of a business that specialized in Asian works of art, pleaded guilty today to illegally trafficking horns from endangered black rhinoceros.

The guilty plea was announced by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).

Zhou, 49, who has worked as an Asian art dealer for years, pleaded guilty today before U.S. District Judge William F. Kuntz II for the Eastern District of New York in Brooklyn, New York, to a one count information charging him with wildlife trafficking in violation of the Lacey Act.  

Zhou was identified as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.

In papers filed in federal court, Zhou admitted to purchasing as many as five uncarved rhinoceros horns from another Asian arts dealer in New York.  Along with the horns, Zhou was given an “Endangered Species Bill of Sale,” from which Zhou was made aware that four of the horns were purchased in Texas and unlawfully transported to New York.  Immediately after purchasing the rhinoceros horns, Zhou offered to sell and later sold the horns, to an associate who was a Chinese national residing in the People’s Republic of China for more than $130,000. 

“These horns are the remains of a dead animal, and one of the world’s most iconic species that will certainly go extinct in our lifetimes if we do not stop this illegal trafficking,” said Assistant Attorney General Cruden.  “We expect those in the arts and auction trade to understand and obey the law, and those that do not will be investigated and prosecuted for these crimes.”

 “Because of the scourge of wildlife trafficking and those like Mr. Zhou who practice it, there is now a very real possibility that the rhinoceros could disappear from Africa,” said Director Ashe.  “We are determined that this never happen and that we don’t leave behind for our children a world without this magnificent wild creature.  The law enforcement efforts of Operation Crash have now seen dozens of rhino traffickers caught and prosecuted, each case sending a clear message to others engaged in this shameful practice that we will stop you and we will bring you to justice.”

Rhinoceros are herbivores of prehistoric origin and the largest remaining mega-fauna on earth.  They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 183 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.

The investigation is continuing and is being handled by the Justice Department’s Environmental Crimes Section and USFWS’s Office of Law Enforcement.  The government is represented by Trial Attorneys Lauren D. Steele and Gary N. Donner of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

Former Canadian Mountie Pleads Guilty to Money Laundering Charges Stemming from a Conspiracy to Smuggle Narwhal Tusks

A retired officer of the Royal Canadian Mounted Police pleaded guilty today to 10 money laundering offenses in the U.S. District Court for the District of Maine, announced Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  Gregory R. Logan, 59, of St. John, New Brunswick, was extradited to the United States on March 11.  Logan, who has been detained since his extradition, will remain in jail pending his sentencing hearing before U.S. District Judge John A. Woodcock Jr. for the District of Maine in Bangor, Maine.

Logan was indicted in the District of Maine in November 2012 and charged with conspiracy, smuggling and money laundering.  All of the counts arose from Logan’s scheme to smuggle narwhal tusks from Canada to the United States for sale to American customers and transfer the proceeds of those sales back to Canada.  Logan was arrested in Canada, based on a request from the United States, in December 2013.  Logan pleaded guilty to a related wildlife smuggling crime in Canada and the terms of his extradition limited the case against him in the United States to the money laundering offenses.  Also charged in the original indictment was Andrew J. Zarauskas of Union, New Jersey.  Zarauskas was convicted after a jury trial in Bangor and sentenced to 33 months in prison.

Narwhals are medium-sized toothed whales that are native to the Arctic.  They are known for their distinctive ivory tusk which can grow to more than eight feet in length.  Given the threats to their population, narwhals are protected domestically by the Marine Mammal Protection Act and internationally by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) – an international treaty to which more than 170 countries, including the United States and Canada, are parties.  It is illegal to import narwhals, or their parts, into the United States for commercial purposes.  Further, any importation must be accompanied by a permit and must be declared to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service.

According to the indictment, Logan smuggled more than 250 narwhal tusks into the United States between 2000 and 2010.  As part of the plea agreement, Logan agreed that the market value of the narwhal tusks in this case was between $1.5 million and $3 million. Knowing that the tusks were illegal to bring into the United States and sell, Logan transported them across the border in false compartments in his vehicle and trailer.  Logan utilized a shipping store in Ellsworth, Maine, to send the tusks to customers throughout the United States, including Zarauskas and others.  Logan knew that his customers would re-sell the tusks for a profit and in an attempt to increase that re-sale price, Logan would occasionally provide fraudulent documentation claiming that the tusks had originally belonged to a private collector in Maine who had acquired them legally.

In addition to shipping the tusks from Maine, Logan maintained a post office box the Ellsworth shipping store as well as an account at a bank in Bangor.  Logan instructed his customers to send payment in the form of checks to the post office box, or wire money directly to his Maine bank account.  Logan then transported the money to Canada by having the shipping store forward his mail to him in Canada, and by using an ATM card to withdraw money from his Maine bank account at Canadian ATM machines.  At times, Logan also directed his customers to send funds directly to him in Canada.

Logan faces a maximum sentence of 20 years’ imprisonment and a $500,000 fine, per count of conviction.  The case was investigated by special agents of the National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Fish & Wildlife Service, Office of Law Enforcement; and Wildlife Officers from Environment and Climate Change Canada.  The case is being prosecuted by Trial Attorneys James B. Nelson and Lauren D. Steele.  

North Carolina Commercial Fisherman Pleads Guilty to Illegally Harvesting and Selling Atlantic Striped Bass

Dewey W. Willis Jr. of Newport, North Carolina, pleaded guilty today in U.S. District Court in Wilmington, North Carolina, to federal charges regarding the illegal harvest and sale of Atlantic striped bass from federal waters off the coast of North Carolina during 2010, the Justice Department announced today.

This multi-defendant investigation began as a result of the National Oceanic and Atmospheric Administration (NOAA) receiving intelligence and directing the U.S. Coast Guard to board the fishing vessel Lady Samaira in February 2010, based on a complaint that multiple vessels were fishing Striped Bass illegally.  Along with 13 other commercial fishermen, Willis was charged with violating the Lacey Act, a federal law that prohibits individuals from transporting, selling or buying fish and wildlife harvested illegally.  Additionally, Willis, along with 11 of these fishermen, also has been charged with filing false reports in connection with the illegally harvested fish.  Specifically, the indictment against Willis alleges that the he transported and sold Atlantic striped bass, knowing that they were unlawfully harvested from federal waters off the coast of North Carolina.  In an effort to hide his illegal fishing activities, Willis, falsely reported harvesting these fish from state waters, where it would have been legal.

Willis is licensed by the state of North Carolina and NOAA to fish in state waters only for striped bass.  The defendant faces a maximum sentence of five years in prison and a $250,000 fine.  A sentencing hearing has been scheduled for Dec. 12.

“The illegal poaching of striped bass by commercial fishermen has a major impact on the survival of this iconic fish resource and has the potential to devastate the future livelihoods of law abiding commercial fishermen,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “Today’s plea agreement demonstrates the department’s dedication to pursuing those who fail to respect the law and fail to adequately monitor their harvest to stay within legal limits.” 

“Our office was pleased to partner with the Environment and Natural Resources Division of the Department of Justice in this significant case,” said U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina.  “This prosecution makes clear that efforts to circumvent laws regulating commercial fishing will be enforced vigorously.”

In early spring each year, wild coastal striped bass, Morone saxatilis, known regionally as “rockfish,” “striper” or “rock,” enter the estuary or river where they were born to spawn and then return to ocean waters to live, migrating along the coastline.  They may live up to 30 years and reach 50 pounds or more.  The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.  

Under federal law, Atlantic striped bass may not be harvested from or possessed in federal waters.  This ban on fishing for Atlantic striped bass in federal waters has been in place since 1990 due to drastic declines of the stock that occurred in the 1970’s.  North Carolina allows fishermen to harvest fish from state waters, but often limits fishermen to no more than 100 fish per fishing trip.  Commercial fishermen are required to report on a fishing vessel trip report the fish harvested from state waters; that report is then submitted to NOAA’s National Marine Fisheries Service (NMFS).  NOAA uses the information on this report to assess the fishery and its sustainability throughout the eastern seaboard.

According to the Atlantic Marine Fisheries Commission, “striped bass have formed the basis of one of the most important fisheries on the Atlantic coast for centuries.  Early records recount their abundance as being so great at one time they were used to fertilize fields.  However, overfishing and poor environmental conditions lead to the collapse of the fishery in the 1980s.”

The North Carolina Division of Marine Fisheries, along with other states, has reduced the catch limits for the 2015 striped bass commercial fishing season in the Atlantic Ocean and Albemarle Sound/Roanoke River areas, citing a decline in stocks.  The division cited 2013 surveys revealing that the female spawning stock has been steadily declining.  The reduction applies to all commercial and recreational striped bass fishing for all the eastern coastal states.

The Lacey Act makes it unlawful for a person to transport or sell fish that were taken in violation of any law or regulation of the United States and carries a maximum penalty of five years in prison and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.

The investigation was conducted by the Law Enforcement Offices of NOAA, with assistance of the Investigative Service from the U.S. Coast Guard, the North Carolina Marine Patrol and the Virginia Marine Police.  This case is being prosecuted by Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Banumathi Rangarajan for the Eastern District of North Carolina.