So you want a SA M1A....because you think it'll be better than a Norc M14s (m305)

[the_big_mike]

anyways.

figured people were freaking out in the other thread and thought this deserved a bump.

 

[Dimitri]

My neighbor was asking $ 3500 for his SA Supermatch, which is actually a bit below market value. As a fact, I sold one almost identical in year 2000 for way more than that.

I wouldn't even consider that rifle a "deal". New its 4,350$ for a Douglas SS Barrel and McMillan stock. With a Carbon Steel Barrel & wood stock it costs a little more (under 50$ more actually) then the one he was selling.

The Norinco bans are caused by the company trying to smuggle fully automatic AK's into the USA so here was a EO issued by Clinton putting a total ban on any of their military style weapons to come into the USA. You seriously think Clinton wouldn't have liked the idea of putting US firearms manufactures out of bussince ??

As for Quality control issues, all things considered, when Springfield made 84,000 rifles by the 1994 Assault Weapons ban and has produced over 200,000 rifles already, the complaints do not really add up to many.

And yes I am spending about 2,500$ + taxes dollars on a Springfield Armory M1A.

Dimitri

 

[dan belisle]

"company trying to smuggle fully automatic AK's into the USA"

Details? - dan

 

[Dimitri]

DRAGON FIRE

"In 1996, an 16-month Federal sting dubbed 'Dragon Fire' culminated in the confiscation of 2,000 fully automatic Chinese AK-47 assault rifles that had been illegally imported into the United States from China. Massive arms shipments interdicted on U.S. soil are usually en route to Latin American guerrillas or drug cartels. Not this time," noted Schroeder.

"According to customs officials, the dealer (a Chinese immigrant reportedly working with two large Chinese defense firms) thought the ultimate recipients were 'gang bangers' in the United States," noted Schroeder.

"The dealer also reportedly offered 60 mm mortars, rocket launchers, and 'Red Parakeet' shoulder-fired surface-to-air missiles to undercover agents, who told him that they would be sold to right wing radicals in the U.S. and terrorists in Ireland and Latin America," wrote Schroeder.

"During the investigation, the dealer repeated that the 'Chinese government knew exactly what was going on.' This claim has not been substantiated, but court documents indicate that officials from two large, state-controlled Chinese companies were involved in the deal.

Commenting on role of China North Industries Corporation (NORINCO), the Department of Justice stated that the shipment of weapons from the Dalian plant of NORINCO involved the active participation of that firm's PRC-based vice president, export manager and other officials.'"

Schroeder is not the only one to discover that China wanted to sell weapons to terrorists inside the U.S. According to a 1997 Rand Corp. report, Norinco was heavily involved with the PLA arms firm Poly Technologies and the effort to smuggle fully automatic AK-47 rifles into the U.S.

"Poly's U.S. subsidiaries were abruptly closed in August 1996. Allegedly, Poly's representative, Robert Ma, conspired with China North Industries Corporation's (NORINCO) representative, Richard Chen, and a number of businessmen in California to illegally import 2000 AK-47s into the United States."

"Unfortunately for them," states the Rand report. "Their 'customers' turned out to be undercover U.S. Customs and BATF agents, posing as members of a Miami syndicate. Poly's representative, Robert Ma, fled the country one step ahead of Federal law enforcement officials who had a warrant for his arrest, and his current whereabouts are unknown."

One point worth noting - the U.S. Customs officials were clear that the Chinese officials had to call back to Beijing to get permission to ship the machine guns. The Clinton administration never pursued the Beijing connection.

Thats a clipping I quickly found on the subject. After this Clinton banned Norinco to import ANY military style firearms, which limited the imports only to their shotguns.

Dimitri

 

[ponts]

Thats a clipping I quickly found on the subject. After this Clinton banned Norinco to import ANY military style firearms, which limited the imports only to their shotguns.

Dimitri

Proof the Chinese will sell to anyone with the $$$$.

 

[PeteB]

Dimitri -

you're source is a bit confused yes there was an incident involving Norinco and Full Auto AK-47's. (not sure who DRAGON FIRE is)

This however is not the reason why Clinton signed the Executive Orders (2).

The real reason for the executive order is found from a more reliable source here :
http://cns.miis.edu/pubs/week/030530.htm
and also here:
http://www.nti.org/db/china/engdocs/frsanc_0503.htm


The first EO can be found here:
http://www.disastercenter.com/laworder/12938.htm

and the second here:
http://www.treas.gov/offices/enforcement/ofac/legal/eo/13094.pdf

The second EO just broadened the scope of the first.

It is quite clear though that the entire affair was not related to the AK-47s from:
a) the first EO was in '94 and the second in '98... the AK affair was in '96

b) please also note that Norinco is not mentioned in the EO's - these same EO's also keep many other companies from sending firearms to the USA.

and lastly -

Here is the actual true story behind the Norinco / AK-47 affair :

Sorry can't find the link but have the text on my comp so will post in entirety... sorry for long wall of text...

A federal grand jury has indicted 14 people and a Georgia company in a scheme to smuggle several million dollars worth of automatic weapons into the United States from China. The indictment came after federal agents smashed an arms smuggling ring that they said involved two government-run Chinese munitions firms. The following press release and affidavit outline the building of the government's case.


--------------------------------------------------------------------------------

U.S. Department of Justice

United States Attorney
Northern District of California

FOR IMMEDIATE RELEASE

MAY 23, 1996

MASSIVE SEIZURE OF NEW AUTOMATIC WEAPONS
ILLEGALLY SMUGGLED BY PRC WEAPONS PRODUCERS

SAN FRANCISCO - Michael J. Yamaguchi, United States Attorney
for the Northern District of California; Rollin B. Klink, Special
Agent in Charge, United States Customs Service, San Francisco; and
Paul Snabel, Special Agent in Charge, Bureau of Alcohol, Tobacco,
and Firearms, announced today the largest seizure of fully
operational automatic weapons in the history of U. S. law
enforcement. The weapons were illegally smuggled into the United
States from the People's Republic of China (PRC) during the course
of a federal investigation of an alleged arms trafficking conspiracy
involving Chinese nationals, Chinese resident aliens, and U. S.
citizens, a number of whom represented PRC owned and controlled
munitions manufacturing facilities. The illegal importation of the
weapons into the United States is in violation of the Presidential
Embargo on the importation of weapons and munitions designated on
the United States Munitions List, and U. S. law regarding the
importation, possession, and sale of illegal weapons.

On March 18, 1996, agents of the United States Customs Service
and Bureau of Alcohol, Tobacco, and Firearms seized 2000 AK-47
type fully automatic 7.62mm machine guns. These are military
assault weapons commonly used by the military around the world.
The weapons, which had both Chinese (Norinco) and Korean
markings, had been smuggled into the United States in a container on
board the COSCO ship, Empress Phoenix. Included with the
weapons were approximately 4000 30-40 round ammunition
magazines. It is estimated that the weapons had a street value of more
than four million dollars.

The seizure of the weapons was the culmination of a sixteen month
investigation of high ranking officials, based in both the United
States and the PRC, of POLYTECH and NORINCO, PRC
controlled munitions manufacturing corporations. Hammond KU,
age 49, a Taiwanese resident alien, residing in Soquel, California,
first came under suspicion when information was developed that he
had several thousand Chinese manufactured weapons, in crate.
labelled POLYTECH and NORINCO, stored in his warehouse in
Soquel, California. KU paid federal agent-, acting in an undercover
capacity, to illegally import into the United States, more than 20,000
AK 47 rifle bipods.

During the course of the investigation, KU served as a middleman in
extensive negotiations concerning illegal arms trafficking between the
undercover agents (posing as arms traffickers seeing assault weapons
for illegal purposes) and two American based representatives of PRC
munitions companies. Bao Ping (Robert) MA, a resident alien, age
44, of Los Altos, California, has been identified as the President of
Dynasty Holding Company of Atlanta, Georgia, and the U. S.
representative of the Chinese weapons manufacturing company
POLYTECH. Richard CHEN, age 65, of Aptos, California, has
been identified as the U.S. representative of the Chinese weapons
manufacturing company, NORINCO. Through lengthy negotiations
with undercover agents MA, CHEN, KU eventually facilitated the
sale and importation of the 2000 fully automatic weapons from
NORINCO. The shipment of the weapons from the Dalian plant of
NORINCO involved the active participation of that firm's PRC based
vice president, export manager, and other officials.

On May 22, 1996, Customs and ATF agents arrested seven
individuals and executed search warrants at eight locations
throughout Northern California. Arrested were: Hammond H. KU,
age 49, of San Jose, CA; Richard CHEN, 65, of Aptos, CA; Ching
Hua CHEN, 68, of Aptos, CA; Susan Hong LIN, 39, of San Jose,
CA; Kenneth Frank TAYLOR, 40, of Carmichael, CA; Linda Wei
Lin HUANG, 55, of Atherton, CA.; and Kai Wan (Kevin) WONG,
36, of Hayward, CA. Arrest warrants have been issued for Bao Ping
(Robert) MA, 44 of Los Altos, CA.; and six Chinese nationals
including several high ranking officials of NORINCO.

A sealed Criminal Complaint was filed in San Francisco charging the
aforementioned individuals with Conspiracy, 18 U.S.C. 371;
Smuggling, 18 U.S.C. 545; Firearm. Importation Without License,
18 U.S.C. 922(a)(1); Importation and Sale of Firearms With
Obliterated Serial Numbers, 18 U.S.C. 922(k); Importation of
Firearms, 18 U.S.C. 922 (l); Transfer and Possession of Machine
Guns, 18 U.S.C. 922 (o)(1), Receipt of an Illegally Imported
Firearms, 26 U.S.C. 5861(k); and Control of Arms Exports and
Imports, 22 U.S.C. 2778 (b) (2). The Control of Arms Exports and
Imports Act prohibits, except under strict regulations, the importation
of weapons designated by the President of the United States through
the United States Munitions List.

United States Attorney Michael J. Yamaguchi, noting that the
smuggling of the automatic weapons constituted not only a violation
of federal law but also a direct challenge to the sovereignty of the
United States, praised the efforts of the United States Customs
Service in protecting the nation's borders from such intrusions.

The criminal penalties are as follows:

PENALTY SHEET

18 U.S.C. Section 371:..............Five years incarceration ----
................................$250,000 fine ----
................................3 years supervised release

18 U.S.C. Section 545...............Five years incarceration ----
................................$250,000 fine ----
................................3 years supervised release

18 U.S.C. Section 922(a)(1):........Five years incarceration ----
................................$250,000 fine ----
................................3 years supervised release

18 U.S.C. Section 922(k):...........Five years incarceration ----
................................$250,000 fine ----
................................3 years supervised release

18 U.S.C. Section 922(1):...........Five years incarceration ----
................................$250,000 fine ----
................................3 years supervised release

18 U.S.C. Section 922(o):...........Ten years incarceration ----
................................$250,000 fine ----
................................5 years supervised release

26 U.S.C. Section 5681(k):..........Ten years incarceration ----
................................$250,000 fine ----
................................5 years supervised release

22 U.S.C. Section 2778(b)(2):.......Ten years incarceration ----
................................$250,000 fine ----
................................5 years supervised release

For further information, please contact Michael J. Yamaguchi,
United States Attorney, Northern District of California, at (415) 436-
6968; William P. Schaefer, Assistant United States Attorney,
Organized Crime Strike Force at (415) 436-6830; or Geoffrey A.
Anderson, Assistant United States Attorney, Chief of the Organized

Crime Strike Force at (415) 436-6829.



CITY AND COUNTY OF SAN FRANCISCO

NORTHERN JUDICIAL DISTRICT OF CALIFORNIA

AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT

I, Matthew H. King, being duly sworn, state as follows:

1. I am a Special Agent with the United States Customs Service
(U.S. Customs) in San Francisco, California. I have been so
employed since November 1992. I am a graduate of the Columbia
University Law School. I am also a graduate of the Federal Law
Enforcement Training Center, Criminal Investigator School and U.S.
Customs Basic Enforcement School. I have received training on
methods used by individuals used to smuggle drugs and other
merchandise. I am aware of the following information through direct
participation and conversations with U.S. Customs Special Agents
and Inspectors and Bureau of Alcohol Tobacco and Firearms Agents.

2. I am aware of the following federal statutes concerning firearms
and munitions importation and trafficking:

(a) Conspiracy. 18 U.S.C. Section 371

If two or more persons conspire...to commit any offense against the
United States...and one or more persons do any act to effect the
object of the conspiracy...

(b) Smuggling, 18 U.S.C. 6 545

Whoever fraudulently or knowingly imports or brings into the United
States, any merchandise contrary to law, or receives, conceals, buys,
sells, or in any manner facilitates the transportation, concealment, or
sale of such merchandise after importation, knowing the same to
have been imported or brought into the United States... (c) Firearms
Importation Without License, 18 U.S.C. Section 922(a)(1)

It shall be unlawful for any person except a licensed importer,
licensed manufacturer, or licensed dealer, to engage in the business
of importing, manufacturing, or dealing in firearms, or in the course
of such business to ship, transport, or receive any firearm in
interstate or foreign commerce... (d) Importation and Sale of
Firearms With Obliterated Serial Numbers. 18 U.S.C. Section
922(k)

It shall be unlawful for any person knowingly to transport, ship, or
receive, in interstate or foreign commerce, any firearm which has had
the importers or manufacturer's serial number removed, obliterated,
or altered or to possess or receive any firearm which has had the
importer's or manufacturer's serial number removed, obliterated, or
altered and has, at any time, been shipped or transported in interstate
or foreign commerce.

(e) Importation of Firearms. 18 U.S.C. Section 922(1)

Except as provided in section 925(d) of this chapter, it shall be
unlawful for any person knowingly to import or bring into the United
States or any possession thereof any firearm or ammunition... (f)
Transfer and Possession of Machine Gun 18 U.S.C. Section
922(o)(1)

Except as provided in paragraph (2), it shall be unlawful for any
person to transfer or possess a machinegun.

(f) Receipt of an Illegally Imported Firearm 26 U.S.C. Section
5861(k)

It shall be unlawful for any person to receive or possess a firearm
which has been imported or brought into the United States in
violation of section 5844...

(g) Control of Arms Exports and Imports 22 U.S.C. Section
2778(b)(2)

Except as otherwise specifically provided in regulations issued under
subsection (a)(1) of this section, no defense articles or defense
services designated by the President under subsection (a)(1) of this
section may be exported or imported without a license for such
export or import, issued in accordance with this chapter and
regulations issued under this chapter.

22 U.S.C. Section 2278(a)(1) provides for the designation of a
United states Munitions List, to wit, the defense articles and defense
services designated by the President of the United States. The 22
CFR Section 121.1 sets forth the United States Munitions List.
Category I of that List, designated as Firearms, includes, pursuant to
22 CFR Section 121.9(g), submachine guns and machine guns,
defined as "a firearm originally designed to fire, or capable of being
fired, fully automatically by a single pull of the trigger."

3. Over approximately the last 16 months, the San Francisco
Divisions of the United States Customs Service ("USCS") and the
Bureau of Alcohol, Tobacco and Firearms ("ATF") have conducted
an investigation into the illegal importation and sale of machine guns
and other munitions into the U.S. from the People's Republic of
China (PRC) by individuals in the San Francisco Bay Area with
direct ties to major military and civilian arms manufacturers in the
PRC. During the sixteen month period, the following individuals
were identified as allegedly involved in the importation and sale of
machine guns and other munitions:

A. Hammond KU: KU is the U.S.based individual who brokered
and received the illegal importation of 20,000 Chinese AK-47 bipods
through UC-1. He subsequently introduced the idea of smuggling
containers of weapons from the PRC to both UC-1 and UC- 2. KU
negotiated the separate smuggling conspiracies with the UCs through
first MA, then CHEN, and ultimately QI FENG (MA's contact), as
well as the PRC-based co-conspirators, which resulted in the seizure
of the 2000 AK-47s from China on March 18, 1996.

B. Robert MA: MA was KU's first source for weapons in the first
2500 AK-47 conspiracy. KU received calls from MA concerning
disposition of the UC's funds for the first conspiracy. After MA
refused to meet the UCs face to face, KU turned to CHEN as a an
alternative source. A Beijing bank account for MA's company,
DYNASTY HOLDING CO of ATLANTA Inc, was used to receive
the 38% down payment for the 2000 gun smuggling venture
(approximately $266,500), and received a portion of the final
payment after the guns arrived in the U.S.

C. Richard CHEN: On March 29, 1995 KU told the UCs that a
separate source for weapons (other than MA) was a Norinco
representative in the U.S., Richard CHEN. CHEN was introduced to
the UCs on April 11, 1995. He negotiated the sale of 2500 AK-47s
through his contacts in Cambodia and China. The UCs sent CHEN
$100,000 in June 1995, to his joint company (with GUO, aka KOK
KY). At CHEN's direction the funds were subsequently returned to
CHEN's bank account in San Jose, CA, and then to the UCs. CHEN
ultimately negotiated the transhipment of weapons through the
Philippines. CHEN resurfaced on May 15, 1996, after hearing of
KU's success in the 2000 gun smuggling venture, and commenced
negotiating a deal.

D. Linda HUAN KU's sister, involved in the importation of the
bipods (she put samples on the aircraft for KU). HUANG admitted
to UC-1 she was responsible for the sample bipods. Huang used her
travel agency to arrange for tickets for KU and CHEN to travel to
PRC for negotiations and to receive and send faxes to PRC co-
conspirators for KU. HUANG received a part of the 38% down
payment at an account used by her travel agency in Hong Kong and
wired that portion to Dynasty Holding CO of Atlanta Inc account in
Beijing.

E. Susan LIN: LIN assisted KU in communications with the UCs
while KU was in the PRC. LIN received shipping documents for the
2000 guns and passed them to UC-1. KU called LIN for assistance
in drafting a contract for the CHEN conspiracy (2500 guns), which
he subsequently delivered to the UCs.

F. Kevin WON WONG is an associate of Hammond KU who
assisted in the conversion of weapons to full automatic prior to KU
selling them to the UCs. WONG stores automatic weapons at his
house for Hammond KU.

G. Kenneth TAYLOR: TAYLOR is an associate of Hammond KU
who assisted in the conversion of weapons to fully automatic prior to
KU selling them to the UCs. KU asked WONG if he had conversion
kits for the AK 47s; to which TAYLOR responded that he had "full
auto replacement parts."

H. CHING HUA CHEN, the wife of Richard CHEN, received
numerous faxes from Richard CHEN while he was in Cambodia and
the PRC negotiating the 2500 gun deal for the UCs, which she
would resend to KU. She called KU and received calls from KU in
furtherance of the CHEN 2500 gun conspiracy.

I. QI FEN QI FENG was a PRC-based co-conspirator who
brokered the deal between the UCs (through KU) and the PRC
NORINCO representatives for the 2000 guns. Originally a MA
contact in the PRC in the first conspiracy for 2500 guns, QI FENG
resurfaced substantively in negotiations with KU and the UCs for the
2000 guns. QI FENG sent numerous faxes to KU (which were
addressed to the UCs) concerning the 2000 gun deal. QI FENG
received a portion of the final payment for the 2000 guns at an
account in his name.

J. LU YI LUN is next in command at Norinco Dalian with the
official title, Assistant President. The President of Norinco Dalian,
Mr. (FNU) ZHANG agreed to send LU Yi Lun to negotiate the
second deal with the UCs. He requested an invitation letter from the
UCs through QI FENG and KU which was sent (and addressed to
him).

K. GUO CHENG KUN is an assistant VP at Norinco Dalian. KU
identified GUO CHENG KUN as having authorized QIN to deal
with QI FENG. An invitation was requested by the PRC co-
conspirators for GUO CHENG KUN to negotiate a second deal with
the UCs, which was sent and addressed to him. KU gave GUO
CHENG KUN's business card to UC-2 at the end of January 1996
(before the weapons arrived). KU met GUO CHENG KUN and
described him as the key man who could make the 2000 gun deal
occur.

L. QIN QI XIU is the export manager for Norinco Dalian, and
allegedly negotiated the exportation of the 2000 guns with QI FENG
and KU. KU states she received payment for her participation in the
2000 gun deal. QIN participated in a meeting with the UCs and KU
on March 21, 1996, during which the container seal for the weapons
was returned to KU and QIN, and during which KU was paid
$70,000 in cash. QIN assisted KU in demonstrating how the
weapons should be assembled.

M. ZHANG YI: KU stated he met ZHANG YI on May 11, 1995, in
a hotel in Beijing. He was CHEN's contact in the PRC for the 2500
gun conspiracy. KU stated ZHANG YI was in charge of exporting
weapons from China (no company named). ZHANG YI Facilitated
negotiations-between CHEN and KU and the UCs to tranship the
weapons through Cambodia or the Philippines. He sent faxes to
CHEN with details on completing the deal with the UCs and set the
terms of the final offer by the CHEN co-conspirators to smuggle the
2500 weapons to the U.S. through the Philippines.

N. GUO aka KOK KY: alleged PRC government official with ties to
the Thai and Cambodian governments. GUO aka KOK KY is
CHEN's contact in Cambodia who wired the UC's $100,000 back to
CHEN at CHEN's request (to show "good faith" to the UCs).
Numerous faxes intercepted from GUO aka KOK KY to CHEN on
the mechanics of the 2500 gun conspiracy. Recently met KU and
CHEN in Cambodia to negotiate the use of Cambodian End User
Certificates to smuggle a second shipment of heavy munitions to the
U.S. for the UCs.

4. The Bureau of Alcohol, Tobacco and Firearms have confirmed
that none of the following individuals were, during the relevant
periods discussed herein, licensed importer, licensed manufacturer,
or licensed dealer of firearms, as defined in 18 U.S.C. Sections
921(a)(9)-(11): Hammond KU; Robert MA; Richard CHEN; Ching
Hua CHEN; QI FENG; LU YI LUN; GUO CHENG KUN; QIN QI
XIU; ZHANG YI; GUO (aka KOK KY). In addition, the Bureau of
Alcohol, Tobacco and Firearms, as well as the United States
Customs Service have confirmed that the following firearms are
included in the United States Munitions List: Norinco 7.62mm sub-
machine guns, Type 56; and Norinco 7.62mm sub-machine guns,
Type 56-1 (the weapons that were, on March 18, 1996, imported
into the United States).

5. In June 1994, a confidential informant ("CI") called a USCS
undercover agent ("UC-1") concerning several thousand suspected
firearms being stored at a warehouse owned by Hammond KU in
Soquel, CA. The CI stated that Hammond KU was using the Federal
Firearms License ("FFL") of Gerry GOODMAN. The CI showed
UC-1 crates, allegedly used in the transport and storage of the
weapons, marked POLYTECH and NORINCO. POLYTECH and
NORINCO are state-controlled companies in the Peoples Republic of
China (PRC) which manufacture munitions. The CI informed
Hammond Ku that UC1 was able to import items into the United
States in a manner that bypassed United States Customs.

6. On December 1, 1994, Hammond KU, the CI, and UC-1 met. In
that consensually recorded meeting, Hammond Ku asked UC-1
about surreptitiously importing a small sample shipment of
embargoed firearm parts from China via commercial air. KU
requested that the sample avoid scrutiny by U.S. Customs, because
of a Presidential Arms Embargo. KU agreed to pay $500.

7. On December 14, 1994, an unaccompanied suitcase with AK47
bipods from the PRC arrived at SFIA on United Airlines. The
suitcase was marked with red tape as had been arranged by
Hammond KU. The baggage tag indicated the name Linda HUANG.
HUANG has since been identified as the sister of Hammond KU.
HUANG was taken off the flight in the PRC but her bags were
allowed to continue unaccompanied to the United States. As had been
prearranged with KU, the suitcase was placed in a locker at the
airport. KU picked up the suitcase and left $500 as payment for UC-
1 under a potted tree.

8. On February 2, 1995, Hammond KU met UC-1 in Burlingame,
CA to discuss a $20,000 fee for UC-1 facilitating the entry of a
containerized shipment of 20,000 AK-47 bipods into the U.S. from
the PRC. On February 13, 1995, UC-1 met KU in San Francisco,
CA. KU paid UC-1 $13,500 for the UC's services in arranging the
entry of the 20,000 bipods.

9. On February 14, 1995, a COSCO container (COSCO seal #
001246) arrived in Oakland and was X-rayed at the USCS in San
Leandro, CA. The x-ray and search revealed 400 boxes each
containing 50 new bipods, marked "Made in China". The shipping
documents and invoices reflected "fishing rod racks." On February
15, 1995, UC-1 delivered the 20,000 bipods to KU's warehouse in
Soquel. KU paid UC-1 an additional $15,000 cash for his services.
Gerry GOODMAN helped unload the truck.

10. On February 22, 1995, Hammond KU met UC-1 in Sunnyvale,
CA and furnished UC-1 with one (1) AK-47S, 7.62x39mm machine
gun, serial # 9992289. The weapon was manufactured by "B" West,
Tucson, AZ. KU stated that the price would be $1000.

11. On February 23, 1995, the CI met with KU in Soquel, CA. In
this recorded meeting, KU told the CI that he wanted to meet the CI's
"contact" in Florida in connection with the sale of two hundred
machine guns. The "contact" was an ATF undercover agent ("UC-2
").

12. On February 24, 1995, UC-1 and KU discussed obtaining
additional (domestic) automatic weapons. At KU's request, UC-1
faxed Susie LIN a sheet containing the code words to be used in
future orders of weapons (e.g. Apples = automatic weapons; Alpha
King = AK-47s; Michael Gunn = Machine guns; Poppers =
grenades).

13. On March 1, 1995, UC-2 met KU who told UC-2 that he had
access to 200-300 machine guns. KU said his source could provide
20-30 at a time, but that the real way to make money was to bring in
a cargo container of AK-47 machine guns from China. KU stated
that a container would hold 1200 guns. UC-2 asked if KU had
contacts for smuggling the container into the U.S. and KU replied
that he had smuggling contacts (referring to UC-1).

14. During this meeting, KU showed UC-2 an SKS 7.62x39mm
semi-automatic rifle and explained in detail how to convert the
firearm to full automatic. KU stated that he could obtain a fully
automatic weapon for UC-2. Later that evening, KU sold UC-2 a
Polytech, model AKS-762, 7.62x39mm Machine gun, serial #
PW85- 762-06977 for $1,000. The weapon was tested by ATF
firearms technology branch and found to be fully automatic.

15. On March 7, 1995, KU met with UC-1 in Sunnyvale, CA.
During this meeting KU sold UC-1 one SWD, Inc., model M-11,
9mm machine gun, serial # 89-0004970 for $1000. The weapon was
tested by ATF firearms technology branch and found to be fully
automatic. KU stated to UC-1 that he had a buyer in Florida
(referring to UC-2) interested in purchasing a container of 1200
machine guns from China. KU told UC-1 that he too should consider
purchasing a container of 1200 guns, because moving multi-
container loads of weapons was the only way to make serious
money. Later that night, UC-1 again met KU who sold UC-1 one (1)
Sterling, 9mm machine gun, serial number KR26684, for $1000.
The weapon was tested by ATF firearms technology branch and
found to be fully automatic.

16. On March 16, 1995, UC-2 met KU in South San Francisco. KU
stated he had access to 300,000 AK-47s. UC-2 stated that his people
were interested in purchasing one container (1200) AK-47s. UC-2
stated he could arrange to put 20-25% in escrow in a U.S. bank, but
that the price could not be more that $500 per gun. KU said he would
deliver these terms to his associates in China.

17. Later the same day, KU met UC-2 and sold him one MK Arms,
Inc., Model 760, 9mm machine gun, serial # R532 from a black
canvas bag. That weapon field tested as fully automatic. KU and
UC-2 then discussed the container of 1200 AK-47s for sale. KU told
UC-2 that KU wanted to introduce him to UC-1 so they could
mutually smuggle two containers of guns into the U.S.

18. On March 23, 1995, KU and UC-1 met in San Jose, CA. and
discussed concerns over the importation of automatic weapons from
China. KU agreed to cut the price to $500 per weapon and said the
PRC government knew what was going on. KU said Robert MA
was his partner in this deal. UC-1 told KU that he had renewed his
UC company (Dynasty Import and Export) expressly to import the
weapons at KU's request. This is the same company used to facilitate
the smuggling of the 20,000 bipods.

19. On March 29, 1995, KU met with UC-1 in Burlingame, CA.
The purpose of the meeting was for KU to introduce UC-1, a
facilitator in "smuggling" weapons into the U.S., with UC-2, a
purported investor in illegal arms from Florida. During the meeting,
KU stated that it was his partner, Robert MA's, plan to smuggle
containers of automatic weapons into the U.S. KU explained that
MA was the president of Polytech, USA and had access to these new
Chinese guns. Records checks with the California Secretary of State
confirm that MA is the President of Poly USA, also dba Dynasty
Holding Co. of Atlanta. KU explained that the weapons were
controlled by the Chinese government. KU stated that the guns
would be valued at $525 apiece, 1250 guns to a container, for two
containers. UC-2 then wrote on a napkin several questions as to the
mechanics of the smuggle which KU agreed to ask MA. KU engaged
in a telephone conversation with an individual named "Richard" (later
identified as Richard CHEN), the Norinco representative. KU stated
that CHEN advised that he could assist in importing the guns if MA
backed out of this deal.

20. On April 11, 1995, KU and the UCs met in South San
Francisco, CA. KU introduced Richard CHEN but called him "Lee."
KU said CHEN represented Norinco in the PRC. During the
meeting, KU produced catalogs of various weapons from small arms
to heavy weapons and stated that these were the type of weapons
available through CHEN. KU said the weapons could be transhipped
through Cambodia where the paperwork would be changed to reflect
"tools". KU said CHEN had a contact named GUO (aka KOK KY)
with important contacts in Cambodia. CHEN and KU said they
wanted to work out an agreement to import two containers (2400-
2500 weapons).

21. On May 16, 1995, a Title III interception of wire and electronic
communications was authorized for phones and faxes associated with
KU, MA, CHEN and other targets.

22. On May 17, 1995, the UCs met KU who related information
about two meetings he had attended in Beijing with various co-
conspirators concerning smuggling two containers of automatic
weapons from China to the U.S. KU stated he had met GUO (aka
KOK KY) (identified by KU as a government official with ties to the
Cambodian and Thai governments), and ZHANG YI. KU stated that
ZHANG YI was in charge of exporting the weapons. KU stated that
because of the Oklahoma City bombing and the resulting increased
security, the PRC co-conspirators wanted to tranship the weapons
through Bangkok, as they had connections with officials in Thailand.
KU stated that the Chinese government knew exactly what was going
on.

23. During the meeting, UC-2 showed KU a wire transfer of
$400,000 to a bank account in Hong Kong. That "flashroll" was
deposited into an undercover account in anticipation of the meeting.
Later, KU called a male in China, QI FENG, and told him that the
money had been wired to Hong Kong (referring to the "flashroll").
KU told QI FENG that "he" must know that they are very serious in
that the money had arrived. KU added that HA said that QI FENG
needed to give KU an account number. QI FENG agreed to fax the
information to a facsimile number belonging to Linda HUANG.

24. On May 18, 1995, the UCs met KU in South San Francisco.
During the meeting KU stated that his co-conspirators in China
would fax KU a contract with Chinese signatories to the smuggling
venture. Later that day, KU left a message for MA, in which he
asked that MA call him at his convenience, as it concerned the "Lao
Hei" matter. The Lao Hei is a Chinese expression for "Black Guy",
or organized crime figure, used by the targets as a name for UC-2.

25. On May 21, 1995, KU called Kevin WONG and said he was on
his way to see him and that he had the cash right now. WONG told
KU to come to his mother's house in Mountain View, California, the
next morning. WONG then gave KU his home phone and pager
number. Subscriber checks for that number reflect an address located
at 23039 Klamath Rd., Hayward, CA. The pager number is identical
to pages KU made in front of the UC's concerning obtaining
automatic weapons from his source. A check of California DMV
records reflect that Kevin WONG lives at 23039 Klamath Rd.,
Hayward, CA, the same address as the subscriber for the phone
number WONG gave KU. KU has told the UCs that "KEVIN" was
his source for automatic weapons.

26. On May 22, 1995, surveillance agents observed KU arrive at 864
Hope Street, Mountain View CA. A few minutes later KU was
observed departing the Hope street address, and then arrive at and
enter 340 El Camino, Atherton, California, the address for Linda
HUANG dba as Air and Sea Travel. Surveillance agents followed
KU to Burlingame, South San Francisco, where KU met an asian
male, driving a truck registered to Kevin WONG. Kevin WONG
took a black box from his car, gave it to KU, who placed it in his
trunk. During the meeting between KU and WONG, UC-2 called
KU and asked how the "toy" (a machine gun that KU had agreed to
provide UC-2) for today looked; to which KU responded, "very
good." The following day, on May 23, 1995, KU told UC-2 that
Kevin was doing the conversion for the automatic weapons because
he was very good at it. In response to the question of whether Kevin
WONG had done the conversions on the other weapons delivered by
KU, KU answered yes. KU also offered to take UC-2 to the
machine shop where another KU associate converts some of the
weapons to fully automatic weapons. On May 31, 1995, KU met
UC-2 in South San Francisco and sold him, for $800.00, one MAK
90 machine gun, Sporter AK 47 type, serial number 9308155. KU
stated that WONG had done the conversion from semi-automatic to
fully automatic.

27. On May 23, 1995, UC-1 called KU who said that he was
persuading MA to the table to meet the UCs. KU added that they
should not refer to the weapons by name, rather as "toys". KU
concluded by saying that China was ready and that the money was in
Hong Kong (referring to a UC account with $400,000) so that
nothing was standing in their way. KU added that CHEN was not
totally out of the picture, and that if they agreed on another port
(outside of the U.S. through which to tranship the weapons) it might
work, but that MA was ready. KU said he has not told CHEN it was
off, as they did not know KU was playing one off the other.

28. On May 24, 1995, Hammond KU spoke with Kenneth TAYLOR
and asked if he had the AK conversions kits (kits to convert AK 47s
from semi-automatic to fully automatic). TAYLOR stated that he did
not have the conversion kits but that he had full auto replacement
parts. TAYLOR also said that he had "bolt carriers" and agreed to
provide a copule of sets to KU. TAYLOR provided KU with both
his home telephone number (which Pacific Bell confirmed was
subsrcibed[sic] to by Kenneth TAYLOR, 5521 Loucst Avenue,
Carmichael, California)) and directions on how to get to his house
which was located "on Locust" in the Sacramento area (as was the
telephone number). Approximately one-half hour after the
conversation between KU and TAYLOR, KU told UC-2 that he was
on his way to "Sacramento" to finish the A's (believed to be referring
to AK-47s) with KEN. Previously, KU had told the UCs that
"KEN" was a contact for the conversion of weapons to fully
automatic. On May 25, 1996, KU and UC-2 spoke about the two
"items" (machine guns that were to be delivered by KU to the UCs).
UC-2 asked KU if KEN could supply grenades, to which KU stated
that he would call KEN and ask. On May 30, 1995, KU spoke with
Kevin WONG about the pickup of a weapon from WONG's house.
KU said that he had gone to KEN's house and picked up the "thing"
(a weapon part) and asked WONG if he would show KU how it
worked. KU stated that he had the complete set (believed to be the
parts necessary to convert semi-automatic weapons to full automatic
weapons) and that he needed instructions.

29. On May 30, 1995, KU sent a fax to UC-1. That fax detailed a
Bank of China address and account number for CHINA NORTH
INDUSTRIES, and included "The price for per unit" (sic) was $125.
KU wrote that he was working with "them" (Chinese coconspirators)
and that he was trying to get the lowest price. KU said he would talk
to MA today to nail down the details of a Letter of Credit necessary
for the importation of weapons.

30. On May 31, 1995, KU received a call from MA. KU said that he
had a deal with UC-2 to write "tools" (on the Letter of Credit versus
actually listing "weapons" on the Letter of Credit). In an immediate
second call with MA, KU told MA he was meeting UC-2 that
afternoon, and that he would call MA after the meeting was over. KU
met the UCs who showed KU a proposed Letter of Intent between
the buyers, (DYNASTY IMPORT/EXPORT - the UC company) and
the sellers (CHINA NORTH INDUSTRIES - the apparent seller of
the weapons). The Letter of Intent set forth that CHINA NORTH
INDUSTRIES agreed to sell the UCs 2400 AK-47 full automatic
rifles at the price of $125 per unit. The letter stated that to preserve
confidentiality, all future correspondence would substitute the word
"SLEDGEHAMMERS" for the word "AK-47s". Upon acceptance of
the Letter of Intent by the sellers, and receipt of all shipping
documents by the buyer, $50,000 would be released to CHINA
NORTH INDUSTRIES, and the balance of $250,000 (balance due
on the actual price of the guns) would be transferred to the seller by a
Letter of Credit. KU agreed to the Letter of Intent and said he would
fax it to China after the meeting. KU stated he was leaving for China
on or about June 20, 1995, and would personally inspect the loading
of the weapons. KU provided UC-1 a catalog from POLYTECH
which listed various Chinese weapons and munitions for sale,
including surface to air missiles, tanks, anti-personnel mines, aircraft
and other munitions.

31. Later that day, KU spoke with CHBN and said the UCs
deposited money in Hong Kong. KU said he would meet CHEN and
show him the line of credit and discuss it with him.

32. On June 1, 1995, KU called UC-2 and told him that CHEN
wanted to meet him that evening. KU related that CHEN said he had
talked with his people who wanted to do the same arms importation
as MA. KU stated that CHEN now said he would send the weapons
direct from China to the U.S. for the same price. KU said he had
shown CHEN the Letter of Intent. KU said he would rather go
through CHEN than MA. CHEN told KU that ZHANG YI contacted
CHEN and said that they could do the deal. That evening, the UCs
met KU and CHEN. CHEN laid out his plan to put weapons on the
water in the next ten days, indicating that a company in Cambodia
would be used to facilitate the shipment.

33. On June 2, 1995, UC-2 called KU and asked if the company in
Cambodia could protect the funds. KU said the funds would be safe
because he and CHEN would travel to Cambodia in the next week
and set up a shell corporation. KU told UC-2 that on May 11, 1995,
he met ZHANG YI and GUO (aka KOK KY) in Beijing concerning
this deal. KU also told the UC-2 that Green Land Co. was a shell
corporation which the Chinese co-conspirators have used before to
ship weapons. KU then called CHEN and discussed starting a
company in Cambodia. KU said it would be better if they could use
Green Land Co. CHEN replied that Green Land Co. was not old
enough to establish a credit line with the Cambodian bank, and told
KU to tell UC-2 that they might need two letters of credit.

34. On June 4, 1995, CHEN called KU and said he had just spoken
with GUO (aka KOK KY). CHEN stated that GUO (aka KOK KY)
said he would not release the goods (weapons) unless he sees the
money; and that GUO (aka KOK KY) would not trust the Letter of
Credit.

35. On June 5, 1995, UC-2 called KU who said he and CHEN sent
a fax to China and were not happy with the reply from China. KU
said they were not ready, that the factory needed to be paid before the
weapons could be shipped. KU said he told CHEN that he needed to
call GUO (aka KOK KY) to clarify the matter.

36. On June 6, 1995, UC-2 called KU who said CHEN told him he
had spoken with GUO (aka KOK KY) in detail. KU said they were
dealing with NORINCO in China, and that the factory wanted a
guarantee before shipping the weapons.

37. On June 11, 1995, CHEN called KU to discuss their planned trip
to the PRC. KU asked if they had to go to Cambodia first, and
CHEN said they needed both their names to set up the shell
company. CHEN said they should set up a joint account for the
company and GUO (aka KOK KY) could join in. CHEN said they
would go to Beijing after Cambodia and then call UC-2 to give him
the account number to have his money wired over. CHEN told KU
that once KU decided on the dates, CHEN would fax the information
to GUO (aka KOK KY) so GUO (aka KOK KY) could meet them in
Cambodia. Then they could fly to Beijing together. CHEN said they
would wire the UCs' money to ZHANG YI from Cambodia. Once in
the port of Tientsin with ZHANG YI they would give the money to
him once they see the "goods" (weapons) loaded on board the ship.
KU said he would have his sister (Linda HUANG) arrange the
itinerary.

 

[PeteB]

here is the rest of the wall-o-text:

38. On June 13, 1995, UC-2 called KU and agreed to the "new"
arrangement to front the total cost ($100,000 representing the actual
cost of the guns and profits for the co-conspirators) of the 300 gun
deal. KU agreed that the next deal would be much larger, and could
include heavy weapons and "shoulder fired things" (rocket
launchers.) UC-2 stated they would require a contract, and KU said
there was a standard contract that the Chinese co-conspirators had.
KU agreed to send a video (of the weapons being loaded on the ship
in the Chinese port (as previously discussed in prior negotiations)
and other shipping documents. KU said the money should be sent to
the Cambodian account.

39. On June 21, 1995, CHEN and KU met the UCs in Sunnyvale,
CA. During the meeting KU and CHEN told the UCs that the deal
was confirmed for 300 fully automatic AK-47s. KU said that he and
CHEN would fly to Cambodia by June 30, 1995, where they would
obtain assumed Cambodian names and Cambodian passports. In
Cambodia they would open their account to receive the $100,000
from the UCs, and in return would send the UCs shipping
documents, videotape of the weapons being loaded in China and
photos. They agreed that a larger shipment would be accomplished in
the future, at which time the Cambodian account would be closed, as
would the UC company in the U.S. Immediately after leaving the
meeting with the UCs, KU called HUANG and asked her to book
two tickets leaving in about one week.

40. On June 21, 1995, KU called QI FENG in China. QI FENG has
been identified as MA's contact in China, who was an export
manager for BLT (Bao Li Technologies, or POLYTECH).

41. On June 21, 1995, KU called Susie LIN and asked for help in
drafting a contract to fax to China that night. Later that night, KU
called the UCs and said he would be at the hotel before midnight to
deliver the contract. On June 22, 1995, shortly after midnight, KU
provided the UCs with a proposed contract which set forth the actual
terms of the deal which had been previously agreed. The contract set
forth that the "sample" order was for 300 AK-47 full auto rifles at
$500 a piece, for a total of $150,000. A second order will be for
$350 per "unit" (weapon), and the difference between the first order
and the second will be refunded to the buyer, DYNASTY IMPORT
& EXPORT, (the UC company). The contract also set forth that the
seller will guarantee delivery of the weapons from the port in China,
for delivery within 21 days.

42. On June 22, 1995, QI FENG called KU who asked QI FENG to
fax "it". KU said he was coming at the end of the month, and that the
money would be in the account tomorrow. KU asked if QI FENG
had the shoulder fired 62 mm rocket launchers (which the UCs asked
if KU could provide). QI FENG said in China they called it the
"Type 40" for attacking tanks, and said he had it. KU said he had a
20' container but that only half would be filled, and asked if QI
FENG needed something shipped over from Tientsin to San
Francisco. QI FENG said he would see if something could be
shipped, and that there was something for MA. KU told QI FENG to
fill up the empty space and KU would separate the UCs' weapons
from the other items. QI FENG said MA definitely had items in
Beijing for shipment. Later that day, QI FENG called KU who said
that QI FENG should use Linda HUANG's fax. A short time later,
Linda HUANG called KU and said someone tried to fax something
but that the paper was out. Later, HUANG called KU at and said
there was a fax from NORINCO with a lot of details related to a
contract.

43. On June 28, 1995, KU called CHEN who said that he sent a fax
to KU concerning information CHEN received from GUO (aka KOK
KY) regarding his account in Cambodia. They also discussed that
ZHANG YI promised to get the deal done. Later, KU met the UCs
near San Jose, and provided the UCs with bank account information,
as follows: Bangkok Bank Public Co., Phnom Penh Branch, 26
Norodom Boulevard, Kingdom of Cambodia, Mr. Tan MENG, Acct
# 0819-142794-402. Based upon wire interceptions, MENG is
CHEN's Chinese name. KU also provided the UCs with a contract,
signed by KU and CHEN which set forth that the buyer, DYNASTY
Import & Export (the UC company) agreed with the seller,
GREENLAND Corp. (a front company used in the past by the
Chinese co-conspirators to smuggle weapons) to purchase a
"sample" order of 300 AK-47 fully automatic rifles for $500 each.
The shipping documents were to be given to the UCs on or about
July 7, 1995, by Linda HUANG on her return from Beijing. During
the meeting, KU showed two faxes to the UCs. KU said the faxes
were between CHEN and GUO (aka KOK KY). KU read the faxes
to the UCs which stated that the weapons should be shipped
immediately upon receipt of the weapons, and that a second order for
approximately 8-10 containers could be accomplished in mid-August.
The money would be delivered to ZHANG YI in China. GUO (aka
KOK KY) stated in the fax that one hand would take the money and
the other would take the merchandise. KU added that the
GREENLAND Co. account in Cambodia was for CHEN and GUO
(aka KOK KY).

44. On June 30, 1995, KU sent UC-1 a fax which was a translation
of a fax KU received from CHEN. That fax had originally been sent
by ZHANG YI to GUO (aka KOK KY) and set forth the procedures
to ship the weapons. It stated that it would take approximately 30
days to approve the paperwork. If the UCs could accept that, the
shipping date would be arranged with COSCO and the merchandise
(weapons) would be loaded on the ship.

45. On July 5, 1995, UC-1 received a fax from KU in China which
stated that he was in Beijing and that he was going to the warehouse
to take photos of the weapons. The same day, UC-2 called KU in
Beijing, China. KU stated he had been escorted to the arsenal an
hour from Beijing, where he had been escorted by an unidentified
individual who was responsible for exporting arms all over the world
with the Chinese government. KU attempted to video the warehouse
but was prevented from doing so. He was allowed to video the
"merchandise" (weapons) which KU did. KU said the video would
be delivered to HUANG. KU told UC-2 to contact her at her home.
During the conversation KU said he spoke with CHEN in Thailand
who told KU that the $100,000 (Purchase of Evidence [POE] funds)
had arrived in Cambodia.

46. On July 6, 1995, UC-2 called KU in Beijing. KU told UC-2 that
the merchandise (weapons) would be shipped from China to the "C"
country (Cambodia). KU said the corporation in Cambodia would
handle the transaction and would create paperwork to have the
weapons transhipped to the U.S. and that the guns should arrive in
45 days.

47. On July 10, 1995, KU met UC-1 and UC-2 in Sunnyvale. Lili JI
arrived with KU and sat in his van during the meeting. KU stated
that China had full knowledge of this deal but that they were trying to
insulate themselves. They were however assisting in the paperwork
for this deal. KU said the weapons would be transhipped through
Cambodia, or possibly Thailand. KU added that his first choice for
transhipment was Bangkok because GUO (aka KOK KY) had strong
contacts there. KU added that ZHANG YI had changed the original
contract to reflect "machine gun parts" versus fully automatic
machineguns. KU said that a second, larger order for heavy weapons
was no problem. KU said ZHANG YI used to be with the Chinese
government with responsibility for all exports. ZHANG YI now runs
a company with close government ties. In that capacity ZHANG YI
takes the guns from the munitions warehouse to the ship.

48. On July 12, 1995, a fax addressed to GUO (aka KOK KY) was
intercepted over CHEN's fax sent from Cambodia. That fax
confirmed a call from July 11, 1995, listing specifications, packaging
dimensions and prices for what your affiant believes are weapons
previously ordered by UC-1 through KU. The fax also discussed a
face to face meeting in China or Hong Kong to resolve issues. An
identical fax was sent from CHEN's fax to a fax subscribed to by Lili
JI.

49. On July 13, 1995, CHEN received a fax addressed to GUO (aka
KOK KY) from ZHANG YI. The identifier at the head of the fax
reflected "Green Land Co". ZHANG YI wrote that the price for "item
1" (not specified) was incorrect and the seller wants to include "item
2" in the deal, otherwise they are not interested in doing business. It
is believed that the fax pertains to the proposal of the subjects to ship
2400 guns, instead of 300. The identical fax was sent to Lili JI's fax.
An outgoing fax was sent to the KU fax from CHEN's fax addressed
to GUO (aka KOK KY) and ZHANG YI. The fax urged GUO (aka
KOK KY) and ZHANG YI to do the 300 weapon "sample" and that
the future big orders would come.

50. On July 14, 1995, KU called UC-2 and said he had received a
fax from ZHANG YI. ZHANG YI stated that the guns were on the
water, due in Cambodia or Thailand within three to four days. KU
relayed that the Chinese co-conspirators knew the UCs had funding
for 2400 weapons and had therefore sent 2400 guns to Cambodia
versus 300 guns. ZHANG YI said the risk for 300 was the same for
2400 guns. ZHANG YI therefore made the following proposal: (1)
The UC(s) to go to Cambodia or Thailand to view the 2400 guns; (2)
If the UCs were satisfied, the 2400 weapons would be loaded onto
shipping for the U.S.; (3) at the departure of the weapons from the
foreign port to the U.S., the remainder of the balance from the UCs
would be due. UC-2 made the following counter proposal: the
Chinese could therefore send 300 of the weapons to the U.S. and
warehouse the 2100 remaining weapons. Upon receipt of the 300
guns in the U.S. the UCs would immediately fly to Cambodia (or
Thailand) and negotiate payment for the remaining 2100 guns. KU
said he would fax ZHANG YI immediately.

51. On July 16, 1995, UC-2 called KU who said he was trying to
convince ZHANG YI and CHEN that they should front the money
for the extra 2100 guns, and send the entire 2400 weapons (in two
containers).

52. On July 29, 1995, at approximately 6:18 p.m., UC-2 called KU
and said he was trying to fax some paperwork (related to questions
the UCs had concerning the shipment of the 2500 weapons). KU
told UC-2 to send the fax to one of two fax machines subscribed to
by HUANG.

53. On August 1, 1995, the UCs met KU and CHEN in Sunnyvale,
CA. During that meeting, CHEN and KU called China and spoke
with ZHANG YI. KU related that ZHANG YI stated that the factory
price for the weapons, minus profits to co-conspirators, was
approximately $400,000. In that the UCs had already paid $100,000,
another $300,000 would be required to ship the weapons to the U.S.
Once the weapons arrived in the U.S. the remainder of the funds due
(for profits) would be approximately $475,000, to be split four ways
between GUO (aka KOK KY), ZHANG YI, KU and CHEN.

54. On August 2, 1995, CHEN received a partial fax from ZHANG
YI, which stated that when the shipper had the merchandise ready
and the export procedures had been completed, the buyer would
bring the remaining 50% of the funds (the second $100,000) in a
cashier's check to the final port of exportation. Upon completion of
the inspection of the merchandise, the buyer would deliver the
remaining funds ($200,000) to the seller. The seller would then
ensure delivery to the U.S. CHEN called KU and said that ZHANG
YI wanted them to go to Beijing to discuss the issue.

55. On August 6, 1995, at approximately 4:26 p.m., CHEN sent a
fax to his wife, CHING HUA CHEN, at his residence. CHEN stated
he was in Bangkok, and that GUO (aka KOK KY) would be in
Thailand on August 8, 1995. The fax said that GUO (aka KOK KY)
sent a fax to KU telling him to be in Beijing on August 10, 1995, and
to bring the $100,000. CHEN wrote that the transportation fees for
the Cambodian government was about $40-$50,000. The fax went
on to warn CHING HUA CHEN to be careful of the phone lines at
home, and to check around the area.

56. On August 7, 1995, CHING HUA CHEN sent a fax to CHEN
from her residence. CHING HUA CHEN stated when CHEN saw
GUO (aka KOK KY) he should ask him about the money in
Cambodia and to find out the current situation (referring to the
weapons deal).

57. On August 8, 1995, UC-2 told KU that he had talked with his
superiors who said that an additional $100,000 looked to be no
problem, contingent on a video of the weapons at the tranship port.
KU said that they would take care of that. On the same day, CHEN
sent a fax to CHING HUA CHEN. The fax instructed CHING HUA
CHEN to tell KU they have been waiting for him. CHEN added that
the Cambodian government had everything ready and that KU could
send a reply fax to GUO (aka KOK KY). CHEN sent a second fax to
CHING HUA CHEN telling her to tell KU to do everything he could
to get to Beijing by August 10, 1995. If KU arrived late, the deal
was off, and there are a lot of details to be discussed. CHING HUA
CHEN called KU to ask him if the deal was going or not. KU told
CHING HUA CHEN to tell CHEN to make a video to give the UCs,
so that the UCs would release the money. KU then asked Linda
HUANG to reserve a plane ticket to go to China immediately.

58. On August 14, 1995, KU sent a fax to UC-1 which detailed the
latest deal as he understood it from information which he allegedly
received from China. That fax set forth that the seller (the chinese co-
conspirators) were willing to "cooperate" despite the (small) volume
of the order (2500 automatic weapons). The fax stated that an
additional $150,000 was required to be sent to the same Cambodian
account as the $100,000 sent by the UCs in June 1995.

59. On August 15, 1995, at approximately 10:24 a.m., UC-2 called
KU and said his people were astounded by the 180 degree turn of
events (referring to a fax from KU to UC-1, wherein KU wrote that
the Chinese co-conspirators wanted to ship the weapons direct to the
U.S., if the UCs went to China to inspect the weapons, or the guns
could be transhipped through a port in Africa). UC-2 said that
sending $400,000 without even seeing the guns was asking a lot of
trust on his part. UC-2 said he wanted to deal directly with CHEN.
KU said he would call back with CHEN's number in China. KU
called CHING HUA CHEN and said that UC-2 was still demanding
a guarantee that the guns would in fact be shipped. KU said he
would try to reach CHEN in Tianjin.

60. On August 17, 1995, a fax was sent through an undercover
entity in Miami, FL, to CHEN in Beijing. That fax was directed at
ZHANG YI through CHEN. As detailed above, the fax addressed
concerns the UCs had about the Chinese co-conspirators changing
the agreement established in substance during the August 1, 1995,
meeting with CHEN and KU.

61. On August 18, 1995, CHEN sent a fax to CHING HUA CHEN,
which stated that he discussed the "matter" in Beijing, and a deal was
still possible.

62. On September 6, 1995, CHEN and KU met the UCs in
Sunnyvale, CA. Before CHEN arrived, KU said that Robert MA
needed to smuggle into the U.S. a 20 foot container with assorted
scopes, ring mounts, and drum magazines for the AK-47 rifle. KU
asked if UC-1 could handle the arrangements to smuggle in the
goods. KU added that he desired to smuggle 300 fully automatic
AK-47 "kits" in with MA's container. KU said the container was
ready to sail and could be here within 28 days. When CHEN arrived
at the meeting, he essentially reiterated the same deal as had been
proposed before his departure to China. The UCs requested a
meeting overseas with the other Chinese conspirators and KU
indicated he would attempt to arrange it. During the meeting, CHEN
and the UCs called ZHANG YI in China, who allegedly said the deal
would remain as it had been expressed.

63. On September 7, 1995, CHEN sent GUO (aka KOK KY) a fax
which said, in substance, that pertaining to the meeting in Beijing
with ZHANG YI, CHEN met the UCs that day, who disagreed with
ZHANG YI's suggestion as to how the deal would be completed.
CHEN directed GUO (aka KOK KY) to return the UC's $100,000
(sent in June to Cambodia by the UCs) including interest. This
would demonstrate that the Chinese were not "gobbling up"
(stealing) the UC's funds. CHEN said he knew that they (the UCs)
would not give the deal up because they would make a large profit
from this deal. By returning the money, CHEN would show the UCs
that this deal did not mean that much to them. CHEN asked GUO
(aka KOK KY) to wire the money to Omni bank, 1688 Hostetter
Road, San Jose, CA, Branch no. 122237858, CHING HUA
CHEN, Acct. no. 877005870.

64. On September 8, 1995, CHEN received a fax from GUO (aka
KOK KY) stating that he received CHEN's fax. GUO (aka KOK
KY) said he took $100,000 to the bank to do an electronic transfer,
but that he could not remit it because CHEN had omitted the bank's
name from his fax. GUO (aka KOK KY) concluded by directing
CHEN to send a return fax immediately so that he could transfer the
money back. The next day, CHEN sent a second fax to GUO (aka
KOK KY).

65. On September 10, 1995, a fax was received at a UC fax machine
in Miami, FL (which has been represented to KU and CHEN as
belonging to UC-2). That fax had a cover sheet addressed to UC-2
from KU. It is identical to the fax resent from CHEN to KU and
which was sent originally by ZHANG YI. ZHANG YI said two
issues were to be addressed: 1) Open a bank account at either Hong
Kong-China bank or the Hong Kong branch of China Banking
Group; 2) regarding the "type #47" (AK-47s) there were three
additional "modified" models beside the basic model. ZHANG YI
concluded that after the contract was signed (the goods) would be in
CHEN/KU's hands within 35-45 days.

66. On September 11, 1995, UC-2 and KU discussed the container
with the "kits" shared by MA and KU. KU said the container would
contain 300 disassembled "units" (AK-47s minus the barrels). The
same day, a fax was received at the CHEN fax which was a copy of
an application for a wire transfer to CHING HUA CHEN at the
Omni Bank, San Jose, CA, acct no. 87705870, for $100,000. A
note was handwritten on the corner of the fax from GUO (aka KOK
KY) to CHEN which stated that GUO (aka KOK KY) had gone to
the bank to get the receipt (for the wire transfer). KU then called UC-
2 and stated that CHEN had the UC's $100,000 wired back from
Cambodia to an account in San Jose. KU said the $100,000 would
be kept in San Jose, and would eventually be wired back to Hong
Kong for this deal.

67. On September 13, 1995, KU told UC-1 that the paperwork for
MA's container would be ready soon. UC-1 asked if KU had heard
about the possible government "shutdown" in the news, and KU
exclaimed, "Windows 95!" (referring to a window of opportunity to
move the container through U.S. Customs). KU said it was great
and he would have to get things moving (referring to moving the MA
container).

68. On September 27, 1995, KU met the UCs in Sunnyvale, CA, to
discuss the MA container. KU said the container would contain
approximately $40,000 of assorted (embargoed) Chinese weapons
parts (e.g. scope mounts and drum magazines). KU said that the MA
container would also have 100 fully automatic AK-47s on board. He
would charge the UCs the going street price for those weapons. KU
asked if he could use the phone to call Qi FENG in China. KU spoke
with Qi FENG at length. KU then told the UCs that the weapons
would be complete except for the barrels, which are controlled in
China. Qi FENG told KU that he could put the guns on the water as
early as October 1 or 2, 1995, and that it would take approximately
28 days to reach the Bay area. KU said Qi FENG was currently
arranging space on COSCO. When CHEN arrived at the meeting,
they discussed the 2500 gun deal. CHEN gave the UCs a check for
$100,000, and reiterated that he was doing so as a sign of good faith
that he was not cheating the UCs. CHEN said ZHANG YI was ready
to do the deal within 30-45 days.

69. On October 1, 1995, UC-2 spoke with KU who said he was to
receive a call from an unidentified female, subsequently identified as
QI XIU QIN (and subsequently confirmed to be the export manager
for NORINCO Dalian) who was to give all the shipping documents
to KU for the UCs to facilitate the entry of the MA container. As to
the ZHANG YI deal, KU said he had spoken with CHEN who said
that he had spoken with GUO (aka KOK KY). KU claimed to have
sent a fax to ZHANG YI which requested both a bank account for the
UCs to send $250,000 and the details of the shipment set out in
writing. KU said he received a fax from CHEN with the bank
account information for receipt of the $250,000 by the Chinese co-
conspirators.

70. On October 6, 1995, UC-2 spoke with KU who said he had
spoken with QI FENG who wanted to know if KU had received the
paperwork, from QI XIU QIN (hereafter QIN), regarding the
smuggling deal. KU confirmed that QIN was also MA's contact for
his deal. Later that day, CHEN called UC-2 and said the account for
the Chinese co-conspirators was listed as "Cheer Idyll Enterprises,
Ltd", Account no. # 01287592125708, Bank of China, Hong Kong
Branch. CHEN said the port through which the shipment of arms
would move was Luzon, P.I. UC-2 asked CHEN to call ZHANG YI
to get a fax confirming the port. CHEN said that ZHANG YI did not
want to expose himself in a fax.

71. On October 8, 1995, UC-2 spoke with KU who said he had not
heard from the unidentified female, but that he knew she was in the
Bay area. UC-2 told KU to call MA, and KU replied that in effect,
this was QI FENG's deal. KU said he would get duplicate
paperwork directly from QI FENG. During the conversation, KU
said he had spoken with CHEN who had spoken with ZHANG YI
who would fax the transhipment port to UC-1 in the Bay area, and to
UC-2 in Miami.

72. On October 9, 1995, KU told UC-2 that he was going to meet
QIN, the contact of QI FENG and Robert MA. KU asked UC-2 if
the CHEN deal (for 2500 guns) did not go through, would the MA
deal (for 100 guns) be dead? UC-2 said it would not.

73. On October 11, 1995, KU met the UCs in Sunnyvale, CA to
meet the UCs. KU said that everything was set with QIN. KU said
the 100 AK-47 "kits" would now be complete, including the barrels.
KU said QI FENG alone could not get approval for shipment of the
barrels, but that QIN controlled exports from China and had arranged
it. KU said the guns would be on the water in the next few days, and
that QI FENG was to send the paperwork immediately. KU said this
deal was as solid as the 20,000 bipods (referring to the 20,000 AK-
47 bipods smuggled into the U.S. in February 1995, using the
services of UC-1). Ku asked what the guns should be called on the
shipping paperwork, and UC-1 said that the designation was up to
them.

74. As to the CHEN deal, KU stated that CHEN had told him that
the transhipment port was Luzon, P. I. CHEN arrived at the meeting.
UC-2 told CHEN that they needed account information and the
transhipment port set out in writing. CHEN gave the UCs a fax with
Chinese character written at the top. Included in English was the
information for the "Cheer Idyll Enterprises" bank account. It said
that the inspection and transhipment points for the firearms was still
being decided and would be provided upon receipt of the money per
the schedule previously discussed.

76. On October 18, 1995, a fax in Chinese from GUO (aka KOK
KY) was intercepted over the CHEN residential fax, but addressed to
UC-2 at his Miami undercover fax machine. (On October 19, 1995,
an identical fax, with minor clarifications, was forwarded to UC-1).
That fax set forth conditions for the purchase of the 2500 weapons,
and identified the transhipment port as Luzon, Philippines (as had
been demanded by the UCs at the October 11, 1995, meeting). A
translation of the fax revealed details of the proposed 2500 gun deal
demanded by the Chinese: (a) The total amount of the "merchandise"
(2500 weapons) is $875,000; (b) The UCs are to deposit $200,000
to ZHANG YI's account at the Bank of China, Hong Kong Branch,
account number 01287592125708 (the same account KU and CHEN
told the UCs that the money should be sent under the name "Cheer
Idyll Enterprises" during the October 11, 1995, meeting); (c) An
additional $50,000 is to be deposited to the account of Tan Meng
(aka CHEN), Bangkok Bank, Phnom Pehn Branch, Cambodia,
account number 0819-142794-402 (the same account in Cambodia
that the $100,000 originally fronted to the Chinese was sent); (d) The
remainder of the money (approximately $625,000) is to be deposited
into the UC's account at the Bank of China, Hong Kong Branch; (e)
When the shipment arrives in Luzon, Philippine Islands, the UCs
must personally inspect the merchandise; (f) Upon acceptance by the
UCs, they are to call their Hong Kong bank and transfer $212,500 to
ZHANG YI's account at Bank of China; the remaining $412,000
should be transferred to CHEN's account in Cambodia; (g) When
ZHANG YI and GUO (aka KOK KY) verify the UC's funds have
been transferred, ZHANG YI will notify the captain of the ship, who
will deliver the merchandise to the UCs.

77. On October 25, 1995, the UCs met KU in Sunnyvale, California
and discussed the details of the 100 gun deal with MA. KU stated
that the delay was that QIN wanted to send the barrels for the 100
guns. She and QI FENG were attempting to "squeeze" the barrels on
the guns (referring to assembling the "kits" in China before
shipment). KU said he guaranteed that the deal was a "go", and that
the delay had been over the time required to attach the barrels. KU
confirmed that it was MA's container. KU confirmed that he knew
that the 100 guns and the 2500 guns were going to the U.S. KU also
said he knew that MA recently called ATF to verify that Chinese
scope mounts were prohibited (embargoed) if imported from China.
During the meeting KU and the UCs also discussed the details of the
2500 gun deal with CHEN. KU translated the fax which had been
sent to UC-1. That translation was virtually the same as the
intercepted fax of October 18, 1995. In response to certain questions
about the deal posed by the UCs, KU said the UCs should fax these
questions to ZHANG YI and GUO (aka KOK KY) directly, and he
provided fax numbers for both of the co-conspirators in the PRC.

78. On October 26, 1995, UC-1 received a copy of the
aforementioned fax from QI FENG, (which KU faxed October 25,
1995). QI FENG said he was to meet QIN to discuss the deal. QI
FENG stated that the "customers" (UCs) wanted to know when the
"new product" (100 weapons) would be ready. He explained that it
was getting toward the end of the year and the factory (weapons plant
in the PRC) urgently had to meet quota production. KU referenced a
second fax (not received by the UCs) wherein QI FENG confirmed
to KU that the paperwork for the 100 guns would arrive any day,
and that QIN agreed. Later that day, the UCs sent a fax to ZHANG
YI and to GUO (aka KOK KY), stating that the UCs agreed to the
terms of the proposed smuggling venture but also requested
clarification of certain aspects of the transhipment process. The UCs
requested the bank account information for the Chinese co-
conspirators. (That information was intercepted in the October 18,
1995, fax to CHEN, but was not received by the UCs in the version
of the fax sent to them on October 19, 1995).

79. On November 1, 1995, the UCs sent a second fax to both
ZHANG YI in the PRC and GUO (aka KOK KY) in Cambodia
reiterating their questions as to the terms and conditions of the
weapons inspection and transhipment in the Philippines. The same
day, KU spoke with UC-1 and said he had "double good news." KU
said the factory in the PRC needed KU to sign a "guarantee paper"
which would protect them (concerning the MA shipment of 100
guns). KU said as soon as they received this document, the 100 guns
would be on the water in a few days.

80. On November 2, 1995, UC-2 received a fax at an undercover
entity in Miami. The fax stated that the "supplier" had received the
UC faxes of October 26, and November 1, 1995. The fax stated that
GUO (aka KOK KY) and "his friends" were the "mid-men", and that
ZHANG YI was working as a representative for the supplier. The
fax set forth that their understanding of the deal was that: a) the "mid-
men" would provide an official End User Certificate (EUC) by an
Asian country for the "relevant product(s)" (referring to the 2500
weapons to be sent using the paperwork of GUO (aka KOK KY)
from Cambodia; b) the supplier would be responsible for exporting
the product(s) from China and designate an Asian port outside of
China for inspection (believed to be the Philippines); c) the unit price
F.O.B. that Asian port was $165/unit; d) and that shipment beyond
the Asian port was the mid-men's responsibility. The fax stated that
50% of the cost of the guns was a downpayment, 50% balance due at
the inspection port. The inspection port and the method of inspection
(whether on board shipping or in port) would be told to the mid-men
two weeks before actual delivery. The fax also detailed the illegality
of moving the product(s) to the U.S. without a U.S. EUC.

81. On November 6, 1995, KU told UC-1 that he sent the "guarantee
papers" back to QI FENG and that the 100 guns would be on the
water imminently (as soon as they received the paperwork). The
PRC supplier would then send the original shipping documents to
UC-1.

82. On November 8, 1995, the UCs met KU in Burlingame, CA.
KU stated he would call QI FENG that night to tell him to put the
guns on the water and to fax copies of the shipping documents. KU
said his sister Linda HUANG would travel to China in the next days
and would bring back the original shipping documents for UC- 1 (to
facilitate the entry of the 100 gun shipment). KU asked if the 100
guns came in to the U.S. would the UCs still want to obtain 2500
guns in a second deal. KU added that the 2500 guns could be easily
obtained from QI FENG and QIN (MA's contacts). KU said that he
had spoken with QI FENG who said he spoke with QIN and that
they had said they could supply the 2500 weapons to the UCs.

83. On November 14, and November 16, 1995, both UC-1 and UC-
2 spoke with KU over the phone. During those conversations, KU
stated, in substance, that the container in the PRC was loaded and
ready.

84. On January 9, 1996, a letter to KU was prepared on UC
letterhead stationary (from the undercover entity in Miami). The letter
set forth conditions for further negotiations with KU. The letter
stated that if KU was not on a plane to China by Friday 1/12/96 (as
he had promised earlier), this and all subsequent deals were off. The
letter further demanded that KU immediately give the UCs a number
for a point of contact in China, and bank account information in
Hong Kong for QI FENG. (The purpose of that was to ostensibly
wire the advance payment to QI FENG representing the actual factory
cost of the weapons, minus all profits).

85. On January 11, 1996, KU traveled to China where he met with
the Chinese co-conspirators to obtain 1500-2000 automatic AK-47s
for the UCs. The UCs received a contract from KU stating that the
Chinese factory (NORINCO) would accept a 38% down payment
($266,000) for 2000 weapons to be shipped to the U.S. On January
19, 1996, the UCs wired $199,500 to a Hong Kong account
controlled by Linda HUANG in furtherance of the deal. Wire
transmittal documents obtained from HUANG reflect the money was
subsequently wired to a Beijing bank account, in the name of
Dynasty Holding Co of Atlanta, which the Chinese were to access.
(That is the name of a MA controlled entity). The weapons were to
have all Chinese markings removed, and North Korean markings
stamped on. Further, the Chinese would use a North Korean End
User Certificate to further establish plausible deniability for their
involvement in the sale of the weapons to the U.S. KU returned to
the United States on January 25, 1996. During that time frame, KU
told UC-2 that the three PRC representatives of NORINCO Dalian
(QI FENG, QIN, and GUO CHENG BUN) wanted to visit the UCs
in mid-April for the purpose of negotiating arms deals in the future.

86. On February 4, 1996, KU called UC-2 and stated he was
confirmed to depart for the PRC on February 9, 1996, to oversee the
loading of the weapons. KU identified GUO CHENG RUN as the
Assistant General Manager of NORINCO Dalian. GUO CHENG
RUN had requested KU's presence immediately to oversee the
loading of the weapons. KU described GUO CHENG RUN as
QIN's superior. On February 8, 1996, an additional $67,000 POE
was wired direct to the Beijing account. On February 15, 1996,
shipping documents were faxed to UC-1 through KU's contact,
Susie LIN. The documents received were a bill of lading, invoice,
packing list and container number for 112 cases of "hand tools"
(previously agreed term for the weapons). The weapons were
shipped from Dalian, China (the location of the NORINCO factory)
on COSCO shipping on February 15, 1996. A trace of the container
reveals that the Chinese ship "Wang Ning He" was then slated to
visit ports in Japan and Hong Kong.

87. On February 16, 1996, KU returned from China and handed
UC-1 the original shipping documents.

88. On February 18, 1996, UC-2 asked KU about the people coming
to visit in April (referring to the three main Chinese co- conspirators
in this deal, GUO CHENG KUN, QIN, and QI FENG). KU said
they would come after April 12, 1996. UC-2 mentioned that he had
another order (for weapons) to include 50-100 of the hand tools
"from the shoulder" (referring to rocket launchers). KU said it would
be no problem and that he could get bigger stuff with a guidance
system. KU added that any markings the UC wanted could be
stamped on the weapons (as in the alleged North Korean markings
for the 2000 guns in this shipment).

89. On February 26, 1996, a check with COSCO lines reveals that
the container was to be transferred to the COSCO ship "Empress
Phoenix" and was to arrive in Oakland, CA on or about March 18,
1996.

90. On February 28, 1996, UC-1 met KU in South San Francisco.
KU gave UC-1 118 sheets of paper with Chinese markings and
serialized numbers. KU explained that QI FENG had just sent him
this "packing list" for the weapons in the container. KU explained
that each sheet of paper represented a packing case, and the serial
numbers of the specific weapons in the case. KU added that some of
the weapons were Type 56 (full stock AKs), and some were Type
56-1 (metal folding stock). KU offered to videotape himself
assembling four of the weapons after their arrival so that the UCs
would have a go-by for assembling the others. KU said he could get
more guns stamped any way the UCs wanted, with serial numbers or
without. KU said these could be sold to "gang bangers" (gang
members). KU also stated that Robert MA had two containers ready
for shipping in China, contingent on the success of the KU/UC deal.

91. On March 1, 1996, UC-2 and KU discussed a second weapons
shipment. UC-2 said he wanted to know the prices for several items,
which they would refer to by line item number in the future. The UC
asked about the price and availability of various weapons from a
Polytech catalogue previously obtained from KU: Line item 1: (50)
type 56, 40-mm "shoulder type" weapons (RPGs); Line item 2: (50)
type 70-1, 62-mm anti-tank rockets; Line item 3: (10) type 52, 57-
mm recoilless rifles; Line item 4: (25) of the "shoulder fired type"
with "a guidance system." KU said UC-2 was asking about a "high
performance" item which was fired from the shoulder, capable of
shooting down "big birds" (aircraft) from a distance of several miles;
Line item 5: (1000) mini machine guns. KU then said all of the above
items were available. KU stated that it was up to UC-1 now
(referring to UC-1 facilitating the entry of the container of 2000
weapons). KU said his people wanted to know about a second deal,
and UC-2 said this was a first step. UC-2 asked about the Chinese
co- conspirator's pending visit, and KU said he needed to make them
reservations, contingent on the UC's schedule.

92. On March 18, 1996, at approximately 0200, the COSCO ship
Empress Phoenix was met by the San Francisco Harbor Pilot outside
the Golden Gate bridge. Agents covertly observed and filmed the
vessel arrive and anchor at Anchorage #7. At approximately 0930,
KU reentered the U.S. from China at SFIA. Subsequent checks
revealed that Robert MA returned at approximately the same time.
UC-1 met KU who gave UC-1 a second set of original shipping
documents, and told the UC that the third set would not be required,
as the Chinese had arranged __ COSCO China, to fax COSCO U.S.,
with a release. A copy of that release was given to UC-1.
Handwritten on the Bill of Lading was "DYNASTY HOLDING CO
OF ATLANTA" followed by a signature in Chinese. As set forth
above, Robert MA is the president of that company). Container #
CBHU0471569 was unloaded from the Empress Phoenix. The
container was covertly picked up from the Howard Terminal, and
delivered to the U.S. Customs facility in San Leandro, CA for
inspection.

93. The container was opened and revealed numerous green boxes
recently painted white. (The smell of paint was evident in the
container). One crate was opened and revealed numerous parts to
weapons wrapped in oil paper and heavily greased. Rich Turner from
the Firearms Technology Branch, ATF/Washington, D.C.,
assembled one weapon and determined that it field tested for both full
automatic and semiautomatic functioning. Other weapons were
assembled and tested with the same results. Turner noted that there
were two types of AK-47-like weapons: a full stock and a folding
stock version, as had been negotiated by the UCs (characterized in
previous contractual agreements with NORINCO as the "Type 56"
and the "Type 56-1"). As of March 25, 1996, the weapons inventory
was completed in San Francisco. The inventory revealed that,
contained in the 112 containers, were 1001 Norinco 7.62mm sub-
machine guns, Type 56; and 999 Norinco 7.62mm sub- machine
guns, Type 56-1. Additionally, there were 3961 30-40 round
magazines with the weapons. The weapons had both Korean and
Chinese (Norinco) markings. The weapons also field tested positive
for fully automatic functioning.

94. On March 21, 1996, the UCs met Hammond KU to pay the
balance due for the guns, approximately $433,000. UC-1 met KU in
the lobby of a hotel in San Francisco and brought him to the UC
room. KU had QIN with him (which had not been planned). UC-1
gave KU $70,000 in cash. KU gave the UCs three bank accounts for
the wire transfer of the remaining balance from the sale of the guns.
Two of the accounts were located at the Bank of China, Beijing
Branch, San Li He Office, Yuetan Nanjie, Guiyan Hotel, Beijing
Post code 100045: (a) Acct. No. 148250042112, Dynasty Holding
Co. of Atlanta, Inc., ($50,900) (the same account used to wire the
initial down payment in this deal, and is associated with Robert MA);
and (b) Acct. No. 4020500-2014-007377-1, QI FENG, ($60,000).
The third account was located at the Hang Seng Bank Ltd.,
Tsimshatsui Branch, 18 Carnarvon Road, Kowloon, Hong Kong,
for $252,150. The name on that account was KUCHIN SU HUI.
(KU later explained that this was the name of an unspecified co-
conspirator's wife. He also stated that it was used to pay off Chinese
Customs personnel. It is believed this is the account for GUO
CHENG RUN). The total amount for payment was $433,050.

95. The UCs asked KU to call QI FENG to tell him: (a) that KU had
received the container seal and his $70,000; and (b) the UCs had just
received the bank information for the wire transfers. KU called QI
FENG and then handed the phone to QIN. UC-2 asked if it was safe
to talk in front of QIN. KU stated that she was the export manager
(for Norinco), and that she helped get the guns to the U.S. KU said
she was a "key person", that she was "safe" and that she was "high
security." KU went on to say that she was the expert; the number one
person for light weapons, and that she got paid also. The UCs
brought out two weapons for KU to assemble.

96. KU then produced sheets of mimeographed paper with various
weapons depicted. KU spelled out the prices of the various weapons,
to include: heavy machine guns, Uzi-type copies, manufactured in
China, and M-16s which were "100%" Chinese copies. KU
mentioned silenced machine guns, and miniature AK-47 "C" type
weapons. KU also offered the UCs "Red Parakeet" missiles, which
KU characterized as being like the U.S. Stinger (surface to air). KU
said they were very expensive (in the thousands), but that it was very
effective. KU said they could take out a 747, that they were hard to
get, and that they were very effective. Several times during this
evolution, KU spoke with QIN. KU said the next shipment could go
from China to Cambodia with no paperwork. UC-1 asked what kind
of markings they could obtain, and KU said anything they wanted,
from Dynasty (the UC company) to Israel or Iraq. KU said his
people in the PRC had a contact who was a Cambodian General who
could do anything they requested. KU said that he had spoken with
QIN and she had said they would visit the UCs in mid-May.

97. On March 22, 1996, UC-1 wire transferred the funds due to the
co-conspirators to the accounts delineated by KU (as described
above).

98. On March 26, 1996, UC-2 spoke with KU who stated that the
Chinese were "elated" over the meeting with the UCs. They were
eager to do another transaction. KU said he would fax UC-2 the
prices for the weapons (discussed in the meeting of March 21, 1996)
and a proposed itinerary for the Chinese co-conspirators' visit to the
United States.

99. On April 1, 1996, UC-2 told KU that when the Chinese visited
the U.S. in May, the purpose was to discuss business (referring to
subsequent weapons transactions). KU said the purpose of the visit
was specifically to discuss future deals.

100. On April 2, 1996, KU asked UC-2 to draft an "invitation" for
QI FENG on the UC letterhead stationary. KU explained that the
invitation would enable QI FENG to obtain a visa to visit the U.S. in
furtherance of negotiations for a second deal. KU stated that GUO
KUN and QIN had "official passports", and so did not need to obtain
visas. KU asked UC-2 to send the "invitation" directly to QI FENG
in China, c/o Dynasty Holding Co. of Atlanta, at fax # 011-861-0-
853-2216. That is the name of MA's company in the U.S. The 38%
down payment for the 2000 guns (approximately $266,000) was
ultimately sent, in parts, to a Beijing bank account in that name,
through the services and accounts of Linda HUANG. It should also
be noted that a portion of the final payment due for the guns
($50,900) was also sent to that same account. A second portion of
the final payment ($60,000) was sent to the same bank in an account
listed for QI FENG). KU also asked that a copy of the "invitation" be
faxed to (415) 363-1699; fax number subscribed to by Linda
HUANG. KU stated that he was departing the U.S. for three Asian
countries to negotiate prices for the weapons in a second order.

101. On April 2, 1996, at KU's direction, an invitation was prepared
on UC letterhead stationary, which was to be sent to QI FENG in
China. That invitation requested that QI FENG and his associates
visit the UCs in San Francisco, to include a visit to "corporate
headquarters" in Miami, between the dates of May 13, 1996 and May
17, 1996. On April 3, 1996, a copy of the fax was sent from an
undercover entity in Miami, FL. to QI FENG in Beijing. A second
copy was sent to HUANG's home fax number. KU called UC-2 and
stated that he had received HUANG's copy and would hand deliver
the same to QIN in L.A. for hand delivery to QI FENG in China.

102. On April 4, 1996, KU told UC-1 that "they" had received the
"invitation" letter. KU confirmed that the Chinese were working on
their visit in mid-May, and that once they had the letter (of invitation)
they would arrange for the trip.

103. On April 25, 1996, UC-2 called KU in Beijing as KU had
requested. KU stated he had just been in Cambodia and that he could
get anything out of there now, using Cambodian paperwork. UC-2
later received a fax in Miami from KU in which he stated he had
obtained price quotes for the "large heavy duty tools" (referring to
missiles and rockets). KU wrote that the paperwork would involve a
third country (Cambodia). KU stated that "our friend" recommends
that if the UCs do want to purchase a second shipment (referring to
the 2000 AK-47s) they had to act quickly as there were personnel
changes forthcoming. KU wrote that GUO CHENG RUN had been
promoted, in part because of his deal with the UCs. KU said GUO
CHENG KUN was busy in the next weeks, after which he hoped to
"vacation" in the U.S.

104. On April 26, 1996, UC-2 called KU in Beijing. KU said there
were miniature machine guns available immediately. KU said that
because GUO CHENG RUN and QIN work for the government,
they had to obtain permission to visit the U.S. KU said a second
order of weapons would go a long way toward ensuring a visit. UC-
2 said he had not anticipated the quick turn around, and although he
did not want to pass the opportunity to obtain AK-47s, he would
rather have the heavy weapons for which he had negotiated (with KU
and QIN on March 21, 1996). KU stated that GUO CHENG RUN's
boss was in fact behind the authorization to sell the weapons, and his
name was (FNU) Zhang. GUO CHENG RUN told KU that (FNU)
Zhang would be the appropriate person to meet UC-2's superior. KU
identified (FNU) Zhang as the president of NORINCO in Dalian.
KU added that he had been in Cambodia with Richard CHEN, who
had learned of KU's success in the 2000 weapon deal, and wanted to
deal with the UCs immediately.

105. On April 29, 1996, Hammond KU returned from China and
Cambodia. UC-2 met KU and discussed several matters, including
prices for weapons in a second deal through the NORINCO pipeline,
the proposed visit of the PRC co-conspirators in May 1996, and a
new pipeline for heavy weapons and missiles using Cambodian End
User Certificates. As to the proposed visit by the Chinese, KU told
UC-2 that QI FENG was the only individual confirmed to come to
the U.S. on May 15, 1996. KU stated that QIN had a reservation,
but was undecided. KU indicated that the Chinese wanted to know if
the UCs were interested in a second order of weapons, for which
they supplied a price sheet on letterhead. KU also provided UC-2 a
typed price list from QI FENG, with the company name, DYNASTY
HOLDING COMPANY printed at the top. This is the name of the
company associated with MA which received the entire 38% down
payment, and a portion of the final payment of POE for the 2000 gun
deal). The price list set forth: "We are happy work with you. Now
we offer price list for you. We hope you like it."

1. 60mm mortar type...................$1300/piece 63
ammo...............................$30/piece

2. RPG-9 launcher.....................$1250
ammo..................................$120/piece

3. Type 79 machine gun................$350

4. Type 82 hand grenade ("golfball")..$12/piece

5. RPG-7 launcher.....................$800
ammo..................................$30/piece

6. Type 82 recoilless rifle...........$5000
ammo..................................$200/piece

7. Type 85 silenced machine gun.......$400

The list was signed, QI FENG.

 

[PeteB]

and the last of it all :

106. On April 30, 1996, UC-2 called KU and stated that his superior
would not commit to future deals with the PRC co- conspirators
without at least meeting an equal counterpart with whom to shake
hands. UC-2 said he and his organization hoped for a larger meeting,
including the higher echelon co-conspirators, to negotiate a mutually
beneficial long term relationship. KU later stated that he called the
PRC and informed UC-2 that at a minimum, GUO CHENG KUN,
QIN, and QI FENG could arrange a visit in four to five weeks. UC-2
stated he had been given the authority to negotiate a "side deal" of
more lethal weapons out of his own pocket (versus through his
superiors in Miami). UC-2 stated that he would like to do a "small"
deal of several hundred thousand dollars, based on the price
quotations obtained from KU on April 29, 1996. KU stated that with
a phone call, QI FENG was prepared to send heavy weapons in a
mixed container, including RPG-9 rockets, miniature grenades,
silenced machine guns, and miniature machine guns. KU said that QI
FENG would do a "small" order on the side until his superiors and
that of the UC struck an accord for a long term relationship.

107. On May 1, 1996, KU asked UC-2 to draft an "invitation" letter
addressed to (FNU) Zhang, whom KU has identified as GUO
CHENG RUN's ultimate boss at the NORINCO plant in Dalian,
China. KU reiterated that he was told that the Chinese were willing to
come to the U.S. but that May 15, 1996, was too soon to make
necessary arrangements. KU stated that after the co-conspirators
received the invitation letter, he would contact QI FENG to discuss
the types of weapons and the cost for the side deal with UC-2.

108. On May 2, 1996, KU and UC-2 discussed sending an
"invitation" to Mr. Zhang (President of Norinco/Dalian) to come visit
the U.S. to negotiate with UC-2 and his alleged boss. QI FENG
agreed to do a small "side deal" for more lethal munitions (RPG-9s,
silenced machine guns, mortars, grenades) with UC-2 (up to
approximately $200,000). KU said HUANG would arrange for the
tickets for the PRC travel, to be paid by UC-2. The invitation was
sent on that date.

109. On May 8, 1996, KU confirmed to UC-2 that the Chinese had
received the invitation. They requested that the UCs send the fax
direct to Mr. Zhang in Dalian.

110. On May 9, 1996, the invitation fax was sent from Miami
addressed to (FNU) Zhang to Norinco in China. KU called UC-2
and said he had faxed UC-2 in Miami. In that fax was a business
card from Zhang's Vice President, MR. "LU" (later identified fully
as LU YI LUN) and a letter from QI FENG. The fax stated QI
FENG had spoken with QIN. The fax requested the UCs resend the
same "invitation" fax from the UCs direct to NORINCO. QI FENG
wrote that Zhang did not feel that it was proper to show his face in
this situation. Zhang was sending his VP, LU YI LUN, to negotiate.
QI FENG stated that their company (NORINCO) wanted to work
with (UC-2's company) continually in future deal. Attached to the
fax was a business card for LU YI LUN, Assistant President, China
North Industries Dalian Corporation (NORINCO). On May 10,
1996, KU called UC-2 and said they (PRC) requested the UCs
resend the invitation with the name of LU YI LUN and QIN
specifically mentioned. KU said it was to get their paperwork,
referring to obtaining visas. KU said he would fax CHIN's business
card to UC-2 for her correct name.

111. On May 15, 1996, KU, CHEN, and the UCs met in South San
Francisco. During the meeting, CHEN provided the UCs with
numerous catlagoues from NORINCO, as well as sheets of data on
various munitions. CHEN stated that he saw the wire transfer
information for the 2000 weapon deal (March 18, 1996) and he was,
as a result, anxious to continue negotiations for a deal with the UCs .

112. Based upon the foregoing, your affiant believes that, from on or
about December, 1994 to the present, in the Northern District of
California, and elsewhere, the following individuals, Hammond KU,
Robert MA, Linda HUANG, Susan LIN, QI FENG, GUO Cheng
Run, QI Xiu Qin, LU Yi Lun, and others, did commit the following
criminal offenses: Conspiracy in violation of 18 U.S.C. Section 371;
Smuggling in violation of 18 U.S.C. Section 545; Firearms Dealing
and Importation Without a License in violation of 18 U.S.C. Section
922(a)(1); Importation and Sale of Firearms With Obliterated Serial
Numbers in violation of 18 U.S.C. Section 922(k); Illegal
Importation of Firearms in violation of 18 U.S.C. Section 922(1);
Importation of Machine Guns in violation of 26 U.S.C. Section
5861(k); and Imports of Arms on the Munitions List in violation of
22 U.S.C. Section 2778. A brief summary of these offenses, fully
described above, is described below:

(i) On March 1, 1995, KU met UC-2 and brought up containers of
weapons available through the PRC through KU's contacts in PRC.
On March 29, 1995, KU "introduced" UC-1 (smuggling facilitator)
to UC-2 (investor) for purposes of purchasing two containers of
2500 weapons. Negotiations ensued with multiple UC meetings,
intercepted phone calls and faxes between KU, MA, QI FENG and
the UCs. Flashroll funds were deposited in an undercover account in
Hong Kong in furtherance of the deal.

(ii) On March 29, 1995, KU discussed with the UCs (and calls) MA,
his source for weapons, allegedly from POLYTECH. QI FENG is
intercepted obtaining bank account information on behalf of MA for
UCs funds, previously "flashed" in an undercover account in Hong
Kong. Various methods of payment including letters of credit, sale
on consignment and payment in full up front are negotiated with KU
on behalf of MA. Negotiations continue through June 1995.

(iii) On March 29, 1995, KU was concurrently negotiating an
identical shipment with CHEN as an alternate source for the
containers of weapons. During June 1995, KU turned to CHEN as
the primary source for the 2500 weapons. See discussion of that
conspiracy, below. KU turned again to MA to ultimately complete
the 2000 gun deal during September 1995.

(iv) In September 1995, KU directed the UCs back to MA. That deal
commenced with importing 300 AK-47 "kits" and ultimately became
a deal for first 1500 then 2000 AK-47s.

(v) From Jan 19, 1996, to February 8, 1996, the UCs deposited
38% down for the 2000 weapons into an account in Beijing for MA,
QI FENG, and the NORINCO representatives involved in the deal
(Ms. QIN, GUO KUN, et al).

(vi) From Feb 2 1996 to March 18, 1996, KU provided the UCs
with copies of wire transmittals (from HUANG), shipping
documents, invoices and bills of lading for the 2000 guns, (invoiced
as 112 cases of HAND TOOLS). The container was to be sent (and
was in fact sent) from Dalian, China (location of Norinco plant) to
Oakland, CA. Fax header on one set of documents reveal the does
were sent from QI FENG to CSTS Travel (HUANG Co in U.S. and
China) to LIN to UC-1.

(vii) On March 18, 1996, the Empress Phoenix arrived in San
Francisco. The container was opened, revealing numerous green
boxes, freshly painted white, with 2000 fully automatic weapons
from the PRC, which were covertly seized. The estimated street
value of the weapons was $4,000,000.00.

(viii) On March 21, 1996, KU met the UCs in hotel with Ms. QIN.
The UCs paid KU $70,000 cash, and received wire transfer account
information for the balance due on the guns, which was paid the next
day.

113. Based upon the foregoing, your affiant believes that, from on or
about December, 1994 to the present, in the Northern District of
California, and elsewhere, the following individuals, Hammond KU,
Richard CHEN, Ching Hua CHEN, Linda HUANG, Susan LIN,
Zhang YI, GUO (aka KOK KY) and others, did commit the
following criminal offenses: Conspiracy in violation of 18 U.S.C.
Section 371 to commit the following violations of federal law:
Smuggling in violation of 18 U.S.C. Section 545; Firearms Dealing
and Importation Without a License in violation of 18 U.S.C. Section
922(a)(1); Illegal Importation of Firearms in violation of 18 U.S.C.
Section 922(1); Importation of Machine Guns in violation of 26
U.S.C. Section 5861(k); and Imports of Arms on the Munitions List
in violation of 22 U.S.C. Section 2778. A brief summary of these
offenses, fully described above, is described below:

(i) On March 29, 1995, KU met the UCs to discuss investing in and
importing two containers of AK-47s from PRC. KU called MA and
CHEN, describing CHEN as an alternate source of weapons if MA
did not come through.

(ii) On April 11, 1995, KU, CHEN and the UCs met to negotiate.
CHEN and KU brought a NORINCO catalog of small arms and
heavy weapons. CHEN and KU stated they had a contact named
GUO in Cambodia and that the weapons could be transhipped
through that country.

(iii) On May 11, 1995, KU met GUO and ZHANG YI in a hotel in
Beijing. KU told the UCs that GUO was a government official with
ties to the Thai and Cambodian governments and ZHANG YI was
responsible for exporting weapons from the PRC. KU and CHEN
subsequently made numerous trips to Cambodia and the PRC in
furtherance of the negotiations. Numerous calls and faxes were
intercepted between GUO, CHEN, KU and ZHANG YI in this deal.
They identified ZHANG YI as the person able to broker the deal.

(iv) On June 28, 1995, the UCs sent $100,000 as a down payment
for the 2500 weapons to the Greenland Corp, a company in
Cambodia owned by GUO and CHEN, and identified by KU as
having been used in the past to smuggle weapons. In Sept. 1995,
CHEN was intercepted directing GUO to return the $100,000 as a
sign of "good faith". GUO returned the funds to a CHEN bank
account in San Jose, CA. The funds were returned to the UCs on
Sept. 27, 1995, by CHEN and KU.

(v) On September 29, 1995, a fax was sent from ZHANG YI to
CHEN which stated they were still deciding on a tranship port for the
weapons and setting forth bank account information in Hong Kong
to receive the UCs funds for the weapons.

(vi) Negotiations continued through November 1995. Discussions
centered around transhipping the weapons through Cambodia, the
Philippines, and Africa, with different scenarios proposed for the UC
payment for the guns. KU had LIN draft contracts, which he
delivered to the UCs. Faxes were sent by the UCs to ZHANG YI
demanding concrete terms. Faxes were received by CHEN and KU
from ZHANG YI. The terms were delivered in October and
November 1995, requiring the UCs to pay a portion of the total cost
of the guns ($800,000) up front, then inspecting the weapons in the
Philippines.

(vii) On April 29, 1996 KU returned from Cambodia where he stated
he had been with CHEN exploring a Cambodian route for heavy
weapons. On May 15, 1996, CHEN and KU met the UCs to
negotiate a second deal. CHEN brought numerous catalogs to show
the UCs and reiterated that anything was available through his
Cambodian connections. CHEN stated several times he desired to do
business with the UCs for future deals, after hearing of KU's
success with the 2000 guns.

114. Based upon the foregoing, your affiant believes that, from on or
about February, 1995 to March, 1995. in the Northern District of
California, and elsewhere, the following individuals, Hammond KU,
Kevin WONG, Kenneth TAYLOR, and others, did commit the
following criminal offenses: Conspiracy in violation of 18 U.S.C.
Section 371; Dealing in Firearms Without a License in violation of 18
U.S.C. Section 922(a)(1); and Transfer and Possession of
Machineguns in violation of 18 U.S.C. Section 922(o)(1). A brief
summary of these offenses, fully described above, is described
below:

(a) On February 22, 1995, Hammond KU sold to UC-1 one (1) AK-
47S, 7.62x39mm machine gun, serial # 9992289.

(b) On March 1, 1995, KU sold UC-2 a Polytech, model AKS- 762,
7.62x39mm Machine gun, serial # PW85-762-06977.

(c) On March 7, 1995, KU sold UC-1 one SWD, Inc., model M- 11,
9mm machine gun, serial # 89-0004970.

(d) On March 7, 1995, KU sold UC-1 one (1) Sterling, 9mm
machine gun, serial number KR26684.

(e) On March 16, 1995, KU sold UC-2 one MK Arms, Inc., Model
760, 9mm machine gun, serial # R532.

(f) On May 31, 1995, KU sold UC-2 one MAK 90 machine gun,
Sporter AK 47 type, serial # 9308155.

Further your affiant saith no.

Date: 5/21/96

___________________________
Matthew H. King
Special Agent
United States Customs Service

Subscribed and Sworn before me this___21__ day of __May__,
1996

______________________________
United States Magistrate Judge

 

[Splatter]

PeteB, that was very interesting. Thank you.

However, if you have that sort of stuff living on your HD, maybe you should start a web site and then you could just supply a pointer.