Westford man admits hiding Chinese investor in scheme with Tyngsboro cop to defraud Lowell Five
TYNGSBORO – A Westford man, accused of a Tyngsboro police officer of conspiring to violate federal gun laws, has agreed to plead guilty to part of the gun charge and new count of conspiracy to commit bank fraud for allegedly hiding $ 6 million investment in secrecy Chinese investor requested over $ 15 million in loans from local banks, records show judicial.
Statements filed in Boston U.S. District Court by prosecutors – who recommend jail time – appear to implicate the local officer in the scheme.
Bin Lu, 49, a Chinese national living in Westford, and Daniel Whitman, 36, of Pelham, NH – a former president of the Tyngsboro Police Patrol Union – were arrested in early January in connection with alleged violations of guns at Hitman Firearms, a Whitman store owns and Lu invests in at 440 Middlesex Road, Tyngsboro.
Tyngsboro policeman and Chinese national charged with federal conspiracy
The firearm charge is based, in part, on allegations that Lu and Whitman conspired to convert a Sig Sauer MCX pistol belonging to Hitman Firearms into a more regulated short-barreled shotgun than the store was. not allowed to manufacture. The pistol was converted when Whitman added a folding butt to it, prosecutors said.
Lu has now agreed to plead guilty to possession of the unregistered weapon, which was in his possession when federal agents conducted research related to the investigation.
The search of Hitman guns by federal agents last year was the first word of the investigation has become known.
During the two men’s initial court appearance in January, U.S. Assistant Prosecutor Eugenia Carris told a federal magistrate that the gun charge was only part of the investigation into Lu and Whitman, and that “involves relations with China.” “
At least part of this “important piece” emerged in court documents this week, and it relates to another company that Lu and Whitman are involved with in Tyngsboro – Freedom Alley Shooting Sports.
– Freedom Alley SS (@freedom_alleySS) September 6, 2017
Freedom Alley Shooting Sports (FASS) was approved by the city in 2016 to construct an approximately 36,000 square foot shooting range, store and training center for law enforcement at 40 and 44 Cummings Road. Construction of the facility began but was not completed until some of the required permits expired and the company defaulted on at least one loan.
Shooting range proposed for the Tyngsboro site
The information – a type of federal court impeachment document – Lu has agreed to plead guilty, Lu and Whitman have told the Lowell Five, Avidia Bank and the US Small Business Administration in claims. separate loans that Whitman and a relative of Lu – referred to as “The Fictitious Owner” in court documents – each owned 50% of FASS.
But in reality, 79% of FASS was owned by a Chinese investor who signed a deal with Lu and Whitman to provide up to $ 6 million in funding in return for the controlling stake, according to the reports. This investor and his wife – referred to only as YM and SF in court documents – have no residential ties to the United States and provided at least $ 4 million of this funding in 2017, just as Lu and Whitman were asking for more. of $ 15 million in loans. , according to the information.
Information Lu has agreed to plead guilty to indicates that he and Whitman did not reveal the true identity of the majority owner of FASS when they applied for a $ 6.5 million loan from the Lowell Five in August 2017; when they applied for a $ 3.7 million loan from the Small Business Administration through Avidia Bank in September 2017; and when they applied for a $ 5.34 million loan – as well as a $ 250,000 bridging loan – from Avidia Bank in October 2017.
“In or around November 2017, CC-1 and Lu obtained the $ 250,000 bridge loan from Avidia,” the information said. “Shortly thereafter, CC-1 and Lu defaulted on this loan.”
In each case, Lu and Whitman were legally required to disclose the majority owner. In the case of the SBA loan, anyone from outside the country who owns more than 50% of the business would have disqualified the application, according to the reports.
The plea deal says prosecutors agreed not to indict Lu’s wife or any of his relatives, but makes no mention of agreeing for Lu to testify against the co-defendants.
Although Co-Defendant 1 (CC-1) is not named in the document, the individual is described as a resident of Pelham, NH, a Massachusetts police officer and the owner and manager of Hitman Firearms – a reference indisputable to Whitman, the owner of Hitman.
The agreement, which was signed by Lu; his lawyer; Carris; and Dustin Chao, head of the public corruption and special prosecutions unit at the United States Attorney’s Office in Boston, says Lu’s total “offense level” according to federal sentencing guidelines will be 24, in part because of his downsizing guilty plea.
According to federal sentencing guidelines issued by the US Sentencing Commission, an offense level of 24 would see Lu face at least 51 months in federal prison if he does not have a criminal record. The plea deal says prosecutors will recommend the minimum sentence. It also includes a provision in which Lu agrees not to appeal a sentence of 51 months or less. The government is also asking for the confiscation of part of Lu’s property in order to recover the losses suffered as a result of the case.
Lu’s attorney, Paul Kelly, did not immediately return a message asking for comment. The plea deal says Lu intends to challenge the finding that the plot caused more than $ 9.5 million in losses. This discovery led to a significant increase in the length of the prison sentence for Lu.
Whitman’s attorney Oscar Cruz declined to comment.
Lu is free to pay a $ 30,000 bond that someone posted for him earlier this year. Whitman is free of an unsecured bond of $ 20,000 and remains on paid leave of absence from Tyngsboro Police.
Tyngsboro Police Chief Richard Howe first put Whitman on paid leave in August 2019 due to the federal investigation into his activities. Selectmen questioned the length of the suspension as they assessed a union grievance over it late last year, with Howe coming under fire during those hearings.
Howe wanted a harsher penalty for Whitman, but was rejected by a majority of Selectmen’s board.
Federal Court records show no new activity in the pending Whitman case since April, when a judge, over prosecutors’ objections, agreed to let Whitman take a ‘recreational’ trip to Fort Myers, Fla. , with friends. Whitman is not allowed to leave the New England states without permission from the federal court.
Whitman was one of three former and current Tyngsboro Police Union officials that the Middlesex District Attorney’s Office investigated as to whether officials misused Police Union money. This investigation was closed without charges having been laid.
Tyngsboro Police Lieutenant reinstated by Selectmen after investigation into spending of union funds
An internal police investigation into the case came under heavy criticism from Tyngsboro selectmen as they voted in executive session to fire another of those responsible, Lt. Shaun Wagner, from service last week.
To download the federal pricing document detailing the claims, click here.
To download the plea agreement signed by Lu and the prosecutors, click here.