WASHINGTON, DC (WLOX) - What started as a Gulfport officer making a traffic stop on a city street is now an international drug trafficking investigation. Officials say drugs brought into Gulfport and distributed across the Mississippi Gulf Coast are linked to a Chinese nationalist named in a new federal indictment.
Tuesday, the Justice Department announced that federal grand juries in the Southern District of Mississippi and the District of North Dakota returned indictments against two Chinese nationals and their North American based traffickers and distributors for separate conspiracies to distribute large quantities of fentanyl and other opiate substances in the United States.
"The first case began with a traffic stop in Mississippi in 2013 that unearthed a domestic drug ring selling synthetic drugs, which were known as spice or bath salts. They were delivering these products by commercial parcel delivery services," Deputy Attorney General Rod Rosenstein said.
But the ensuing investigation revealed something much more sinister than spice or bath salts. Forty-year-old Xiaobing Yan, of China, was indicted in the Southern District of Mississippi on two counts of conspiracy to manufacture and distribute multiple controlled substances, and seven counts of manufacturing and distributing the drugs in specific instances.
Gulfport Police Chief Leonard Papania told WLOX News Now his officers worked closely with local DEA agents and HiDTA members. The chief explained how collectively, they discovered the substances found in Gulfport might have ties to illegal drug activity.
"When you have local, state and federal law enforcement agencies working together, this is the kind of yield they can produce," Chief Papania said.
"The defendants allegedly shipped massive quantities of deadly fentanyl and other synthetic opioids to communities throughout the United States, mostly purchased on the Internet and sent through the mail. The chemicals allegedly killed and injured people in several states, and surely caused misery to many thousands of people," Rosenstein said.
Gulf Coast officials plan to hold a news conference Thursday to further explain what Xiaobing Yan reportedly distributed through Gulfport, the Mississippi Gulf Coast, and the region.
Justice Department officials say Yan operated at least two chemical plants in China that were capable of producing ton quantities of fentanyl and fentanyl analogues. They say he monitored legislation and law enforcement activities in the United States and China, modifying the chemical structure of the fentanyl analogues he produced to evade prosecution in the United States.
Over the course of the investigation, federal agents identified more than 100 distributors of synthetic opioids involved with Yan's manufacturing and distribution networks. Federal investigations of the distributors are ongoing in 10 judicial districts. Investigators have also traced the illegal proceeds of the distribution network.
In addition, law enforcement agents intercepted packages mailed from Yan's Internet pharmaceutical companies, seizing thousands of potentially lethal doses of suspected acetyl fentanyl.
The other case announced Tuesday included another Chinese national, five Canadian citizens, two residents of Florida, and a resident of New Jersey. All were indicted in North Dakota for conspiracy to import and distribute drugs from Canada and China, a money laundering conspiracy, an international money laundering conspiracy, and operation of a continuing criminal enterprise.
Officials said these two investigations reveal a new and disturbing facet of the opioid crisis in America: fentanyl and fentanyl analogues are coming into the United States in numerous ways, including highly pure shipments of fentanyl from factories in China directly to U.S. customers who purchase it on the Internet. Unwary or inexperienced users often have no idea that they are ingesting fentanyl until it is too late. The Centers for Disease Control estimates that over 20,000 Americans were killed by fentanyl and fentanyl analogues in 2016, and the number is rising at an exponential rate.
"This case began when local police officers responded to what has become an all-too-familiar tragedy in the United States: the heroin and fentanyl overdose of two young adults, one who survived and another who did not," said ICE Acting Deputy Director Edge. "Fentanyl is 50 times more potent than heroin and 100 times more potent than morphine. Drug trafficking organizations that deal in such a deadly game will have to face the combined resources of federal law enforcement agencies and our international partners. ICE Homeland Security Investigations is committed to helping combat this new and growing epidemic."
The Chinese nationals are the first manufacturers and distributors of fentanyl and other opiate substances to be designated as Consolidated Priority Organization Targets (CPOTs). CPOT designations are those who have "command and control" elements of the most prolific international drug trafficking and money laundering organizations.
Deputy Attorney General Rosenstein described CPOTs as "among the most significant drug trafficking threats in the world."
"At a time when overdose deaths are at catastrophic levels, one of DEA's top priorities is the pursuit of criminal organizations distributing their poison to American neighborhoods," said DEA Acting Administrator Patterson. "These indictments are a first step; our investigators remain relentless in their pursuit to dismantle these organizations and bring those responsible to justice. DEA, along with our global network of law enforcement partners, will go after these types of criminals wherever they operate."
The cases against Yan and Zhang are being investigated by the DEA, ICE Homeland Security Investigations, the Internal Revenue Service Criminal Investigation, the U.S. Postal Inspection Service and the RCMP.
The case against Yan is being prosecuted by Assistant U.S. Attorney John Meynardie in the Southern District of Mississippi. If convicted, he faces a maximum statutory penalty of 20 years in prison, a $1 million fine, and three years of supervised release.