US Intel Tips Forced China to Prosecute Fentanyl Operation

A trial continues as fentanyl drug traffickers are sentenced in court, Thursday, Nov. 7, 2019, in Xingtai, north China’s Hebei Province. The court sentenced at least nine fentanyl traffickers Thursday in a case that was a culmination of a rare collaboration between Chinese and U.S. law enforcement to crack down on global networks that manufacture and distribute lethal synthetic opioids. (Jin Liangkuai/Xinhua via AP)

XINGTAI, China (AP) — A Chinese court sentenced nine fentanyl traffickers on Thursday in a case that is the culmination of a rare collaboration between Chinese and U.S. law enforcement to crack down on global networks that manufacture and distribute lethal synthetic opioids.

Liu Yong was sentenced to death with a two-year reprieve, while Jiang Juhua and Wang Fengxi were sentenced to life in prison. Six other members of the operation received lesser sentences, ranging from six months to 10 years. Death sentences are almost always commuted to life in prison after the reprieve.

Working off a 2017 tip from the U.S. Department of Homeland Security about an online drug vendor who went by the name Diana, Chinese police busted a drug ring based in the northern Chinese city of Xingtai that shipped synthetic drugs illicitly to the U.S. and other countries from a gritty clandestine laboratory. They arrested more than 20 suspects and seized 11.9 kilograms (26.2 pounds) of fentanyl and 19.1 kilograms (42.1 pounds) of other drugs.

In form, the enterprise resembled a small business, with a perky sales force that spoke passable English, online marketing, contract manufacturing, and a sophisticated export operation, according to U.S. and Chinese law enforcement.

But the business had grave implications. Police photographs of the seizure show a dingy, chaotic scene, with open containers of unidentified chemicals and Chinese police in rubber gloves and breathing masks.

Liu and Jiang were accused of manufacturing and trafficking illicit drugs. The others were accused of trafficking.

Chinese officials said the Xingtai case was one of three fentanyl trafficking networks they are pursuing based on U.S. intelligence, but declined to discuss the details of the other cases, which are ongoing.

Austin Moore, an attaché to China for the U.S. Homeland Security Department, said the Xingtai case was “an important step” showing that Chinese and U.S. investigators are able to collaborate across international borders.

Moore said Chinese police identified more than 50 U.S. residents who tried to buy fentanyl from the Xingtai organization. Those leads prompted over 25 domestic investigations and have already resulted in three major criminal arrests and indictments in New York and Oregon, he said.

Scrambling to contain surging overdose deaths, Washington has blamed Beijing for failing to curb the supply of synthetic drugs that U.S. officials say come mainly from China. In August, President Donald Trump lashed out at Chinese President Xi Jinping for failing to do more to combat illicit opioid distribution in China’s vast, freewheeling chemicals industry. U.S. officials have reportedly moved to link Beijing’s efforts on fentanyl to U.S. trade talks.

Yu Haibin, deputy director of the Office of China National Narcotics Control Commission, on Thursday called allegations that Chinese supply is at the root of America’s opioid problem “irresponsible and inconsistent with the actual facts.”

“Drug crime is the public enemy of all humankind,” he added. “It’s about the life of human beings. It should not be related with the trade war or other political reasons.”

Chinese officials have been at pains to emphasize the efforts they have made to expand drug controls and crack down on illicit suppliers, even though synthetic opioid abuse is not perceived to be a significant problem in China.

But prosecuting cases against a new, rising class of Chinese synthetic drug kingpins has remained a challenge. Profit-seeking chemists have adroitly exploited regulatory loopholes by making small changes to the chemical structure of banned substances to create so-called analogs that are technically legal.

U.S. officials have been hopeful that China’s move earlier this year to outlaw unsanctioned distribution of all fentanyl-like drugs as a class will help constrain supply and make it easier to prosecute Chinese dealers.

According to the U.S. Centers for Disease Control and Prevention, more than 500,000 Americans died of drug overdoses in the decade ending in 2017 — increasingly, from synthetic opioids like the ones sold by the Xingtai network.

The American opioid crisis began in the 1990s, when the over-prescription of painkillers like OxyContin stoked addiction. Many people who became hooked on pain pills later moved to heroin. Fentanyl — an even more potent lab-made drug that raked in profits — then entered the U.S. illicit drug supply, causing overdose deaths to spike.

*** China sentences 9 to jail for smuggling fentanyl to U.S ...

The question of what, if any, responsibility China should bear for fuelling a deadly opioid crisis in the United States has been a bitter source of contention between the two superpowers.

China’s jailing of nine people Thursday for trafficking and selling fentanyl to US buyers following a rare joint probe with US law enforcement would suggest Beijing is moving to address the problem.

But experts warn that while the case is a big step, it is not enough to stop the drug from pouring into the United States — from China and increasingly from Mexico as drug cartels pick up the slack.

Here is a look at the opioid crisis and the tensions it has caused between China and the United States:

What’s fentanyl?

Fentanyl was introduced to the US market in the 1960s as an intravenous anaesthetic to manage severe pain. It is used for cancer patients or those receiving end-of-life care.

The drug is 50 times more potent than heroin, with only a few milligrammes — equivalent to a few grains of sand — enough to kill someone.

It is trafficked into the United States, primarily from China and Mexico, in the form of powder or tablets, and is sometimes mixed with heroin and cocaine.

Fentanyl and other synthetic opioids killed 32,000 people in the US last year according to government data.

The drug can be bought online and shipped to the United States via regular mail, posing a major challenge for postal inspectors sifting through mountains of packages.

What’s China doing about it?

Trump has long urged China to crack down on fentanyl.

It has even become a bargaining chip in the trade spat between the world’s two largest economies.

“High-level officials continue to blame China for the failure to stem the flow and that might be impacting the trade negotiations,” Bryce Pardo, a policy researcher at RAND Corporation, told AFP.

When Trump and President Xi Jinping declared a trade war truce at a summit in Argentina in December 2018, the Chinese side said it would designate all variants of fentanyl as controlled substances.

Trump hoped the move would be a “game changer” because China applies the death penalty against drug dealers.

It was not until five months later, in May, that China finally designated all fentanyl analogues as a controlled substance.

Before the ban, smugglers could skirt the law by changing the formula to make fentanyl-like drugs.

But three months later, Trump complained that China was still not doing enough.

Then came the news on Thursday that a court in northern Hebei province had handed a suspended death sentence to a smuggler and jailed eight others for terms ranging from six months to life after the first successful joint US-China investigation against a fentanyl operation.

Is it enough?

“It’s one case. You can count it as a success and it is,” Mike Vigil, a former head of international operations at the US Drug Enforcement Administration (DEA), told AFP.

“But there is much more to be done. That’s a very tiny tip of the iceberg,” Vigil said.

Experts say China lacks the manpower to inspect all laboratories that produce fentanyl.

“The big problem is that there are so many laboratories and they have about 2,000 inspectors, which is not nearly enough,” Vigil said.

Scott Stewart, a security analyst at US intelligence consultancy Stratfor, said the flow of fentanyl and its precursor chemicals will not stop until China addresses “deeper problems” such as going after “powerful players” and lifting tax credits companies get for selling certain chemicals.

Is the ban working?

While the US welcomed China’s ban on all types of fentanyl, the move appears to have shifted production to Mexico, where drug cartels have quickly adapted to new law enforcement actions.

Chinese labs also produce the chemicals needed to make fentanyl and Mexican drug traffickers are importing them to produce the narcotic themselves, Vigil said.

“Precursor chemicals are fuelling the rise in the manufacture of fentanyl in Mexico by the major drug cartels,” Vigil said.

The DEA said Monday the cartels were making “mass quantities” of fentanyl-laced drugs.

China, for its part, continues to deny it is the source of the problem.

Following Thursday’s court case, Yu Haibin, a Chinese anti-drug official, pointedly said American deaths from overdoses had continued to rise after Beijing cracked down on all types of fentanyl.

China is about to Own Uganda

It is called debt-trapping by China. China has been trapping small desperate nations for several years and few are paying attention. Imperialism? Yes on a global scale.

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Uganda is about to default to China. 39% of the debt in Uganda is owed to China. It could be that beyond Uganda, Tanzania, Ethopia and Kenya could be the next victims to debt-trapping. China financed a $4 billion oil pipeline as part of the Belt and Road initiative. When this default suraces, China will own the strategic sites that connects Beijing to the Persian Gulf. Railways are an essential part of the required transportation channels.

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African Stand reported in December last year that the Kenyan government risks losing the lucrative Mombasa port to China if the country fails to repay huge loans advanced by Chinese lenders, but both Chinese and Kenyan officials have dismissed that the port’s ownership is at risk.

Others think the Chinese government is in some ways gangsters, taking over mines all over Africa, sending thousands of Chinese workers, destroy the environment, bring the minerals such as copper, sink, gold, silver, diamonds etc home, and make deals with corrupt politicians to plunder the countries.

“The case is one of the examples of China’s ambitious use of loans and aid to gain influence around the world and of its willingness to play hardball to collect,” says the New York Times on December 12, 2017.

At a time in Somalia when local fishermen are struggling to compete with foreign vessels that are depleting fishing stocks, the government has granted 31 fishing licenses to China.

But Uganda’s auditor-general warned in a report released this month that public debt from June 2017 to 2018 had increased from $9.1 billion to $11.1 billion.

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The report — without naming China — warned that conditions placed on major loans were a threat to Uganda’s sovereign assets.

It said that in some loans, Uganda had agreed to waive sovereignty over properties if it defaults on the debt — a possibility that Kasaija rejected.

“China taking over assets? … in Uganda, I have told you, as long as some of us are still in charge, unless there is really a catastrophe, and which I don’t see at all, that will make this economy going behind. So, … I’m not worried about China taking assets. They can do it elsewhere, I don’t know. But here, I don’t think it will come,” he said.

n December 2017, the Sri Lankan government handed its Hambantota port to China for a lease period of 99 years after failing to show commitment in the payment of billions of dollars in loans.

Also in September 2018, African Stand reported that China was taking over Zambia’s state power company and Kenneth Kaunda International Airport over unpaid debt rippled across Africa, despite government denials.

China’s Exim Bank has funded about 85 percent of two major Ugandan power projects — Karuma and Isimba dams. It also financed and built Kampala’s $476 million Entebbe Express Highway to the airport, which cut driving time by more than half. China’s National Offshore Oil Corporation, France’s Total, and Britain’s Tullow Oil co-own Uganda’s western oil fields, set to be tapped by 2021.

Big Warnings of China Military Expansion

McRaven, the former head of Joint Special Operations Command overseeing the U.S. Navy SEAL team that took down Al Qaeda leader Osama bin Laden at his Pakistan compound in 2011, noted that Chinese technologies such as 5G commercialization is already beating the United States.

The Chinese military displayed several weapons during its National Day parade, including a new supersonic jet that can reportedly reach speeds faster than Mach 3.3, at more than 2500 miles per hour.

The PLA’s Latest Strategic Thinking on the Three Warfares

The supersonic jet, called the DR-8, could play a key role in a potential conflict with the U.S. military in the South China Sea.

“China has invested a lot of resources into military science and technology development in a bid to enhance its nuclear deterrence capability over the past years, which Beijing believes represents a strategic measure in countering the global military hegemony [of the United States],” Hong Kong-based military analyst Song Zhongping said.

Additionally, China doubled its nuclear arsenal in the past decade and is set to double it again in the next, top U.S. Strategic Command (Stratcom) officials stated in August.

“China has long had a no-first-use policy, and yet they’ve doubled their nuclear arsenal in about the last decade, and they’re on track to double it again in the next decade,” said Rear Admiral Michael Brookes, director of intelligence for Stratcom.

As noted by Newt Gingrich:

Now, imagine that China launches a campaign against Taiwan with the help of Russian air forces.

This would entirely change the dynamic, making it much more difficult and costly (in blood and treasure) – and much less likely for any sort of U.S. victory. Now, instead of a focused conflict with China over a specific piece of territory, the U.S. would have to decide whether it wanted to risk engaging with a cooperative China and Russia at the same time.

For many years, China and Russia were like two estranged communist relatives, but that is changing. In recent years, China and Russia have cooperated in a number of military exercises – and their first long-range joint air patrol in the Asia-Pacific region this past summer.

Chinese Communist Party General Secretary Xi Jinping has met with Russian President Vladimir Putin 24 times since 2013, while he has only met with his U.S. counterpart 16 times during that period.

This activity creates a real potential for a China-Russia strategic alliance which would turn much of our national security planning and strategy on its head.

Republic of China, Taiwan | Operation World

China considers Taiwan one of it’s own provinces yet Taiwan is independent which China is fighting. Known as the ‘one China policy’, Western nations including the United States are not to have any kind of relationship with Taiwan but the United States does and this is one of the causes in the trade negotiations.

After decades of China’s veiled threats to invade and a long-running campaign to get Taiwan’s allies to shift their diplomatic allegiance to Beijing, researchers, government officials, and lawmakers in Taipei all say that China is pursuing a new tactic in the runup to Taiwan’s Jan. 11 presidential vote: election meddling. “China is following the steps from Russia,” says Tzeng Yi-suo, head of cyberwarfare at the Institute for National Defense and Security Research, which is advising Taiwan’s government on ways to counteract the interference. “In our election campaign periods, there is a most striking influence campaign coming from the Chinese Communist Party.”

China’s disinformation apparatus goes well beyond what it considers its borders, according to an analysis published by Harvard researchers in April. Using proxies around the world and some of the same social media platforms it bans at home, the government in Beijing posts 448 million comments a year aimed at promoting a pro-China agenda or sowing discord, the researchers found. In August, Twitter Inc. suspended 936 mainland Chinese accounts, part of a larger network of 200,000 spam accounts it disabled because of what it called a “significant state-backed operation” working to undermine Hong Kong’s pro-democracy demonstrations. On Sept. 20 it suspended an additional 10,000. Facebook Inc. and YouTube have disabled accounts for similar reasons. In December, new foreign-influence laws went into effect in Australia aimed at blocking China’s efforts to sway politics and key decision-makers in that country.

Chinese agencies have been launching an estimated 30 million cyberattacks against Taiwan a month, according to the government’s director general of cybersecurity, Jyan Hong-wei. The patterns indicate Chinese state involvement, he says. Read the full detailed summary here.

SF: Spy, Leave the Room Key at the Front Desk

This is a movie thing for sure not only that happened in San Francisco but went to Columbus, Georgia. China is operating with hired spies in the United States and Beijing is overtly stealing and buying from the United States.

Northern California Resident Charged with Acting as an Illegal Agent

American Citizen Arrested for Acting as an Illegal Foreign Agent of the People’s Republic of China

The Department of Justice unsealed charges today in a criminal complaint charging Xuehua Peng, also known as Edward Peng, 56, for acting as an illegal foreign agent in delivering classified United States national security information to officials of the People’s Republic of China’s Ministry of State Security (MSS).

“According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China.  His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country,” said Assistant Attorney General of National Security John C. Demers.  “Coming on top of our many recent Chinese espionage cases—involving both national defense and intellectual property information—this case illustrates the seriousness of Chinese espionage efforts and the determination of the United States to thwart them.”

“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” said U.S. Attorney David L. Anderson for the Northern District of California.  “Defendant Xuehua (Edward) Peng is charged with executing dead drops, delivering payments, and personally carrying to Beijing, China, secure digital cards containing classified information related to the national security of the United States.”  U.S. Attorney Anderson further stated, “The charges announced today provide a rare glimpse into the secret efforts of the People’s Republic of China to obtain classified national security information from the United States and the battle being waged by our intelligence and law-enforcement communities to protect our people, our ideas, and our national defense.”

“The FBI, along with our partners, will aggressively pursue foreign agents operating illegally in the United States attempting to steal our country’s most sensitive information.” said Assistant Director John Brown of the Counterintelligence Division. “This case should serve as a warning to the government of China as well as any other foreign adversary looking to replicate this activity. The FBI, and our intelligence and law enforcement partners, will not waiver.  We will bring all of our resources to bear to defeat hostile foreign intelligence services and protect our nation’s security. I would like to thank FBI counterintelligence personnel throughout the country who tirelessly worked this investigation over the course of many years, particularly those personnel in our Counterintelligence and San Francisco Divisions.”

“Putting an end to Mr. Peng’s alleged actions are an important and significant step in dismantling the PRC’s overall efforts against our country,” said Special Agent in Charge Bennett of the FBI San Francisco Division.  “Our message is clear: the FBI, along with our intelligence community partners, will pursue foreign adversaries -at any level of an operation- and disrupt their malicious activity when it is detected.”

According to the complaint filed Sept. 24, 2019, and unsealed this morning, Peng, 56, a U.S. citizen living in Hayward, California, acted at the direction and under the control of MSS officials in China in retrieving classified information passed to him by a confidential human source (the source), leaving money behind for the source, or both.  His activities included one dry run and at least five successful “dead drops” between October 2015 and July 2018.  The dead drops occurred in the Bay Area and in Columbus, Georgia.

The table below summarizes the allegations in the complaint about each successful dead drop, including the date of the dead drop, the location of the dead drop, what Peng left in the hotel room, and what Peng retrieved from the hotel:

Date

Location

Peng Left in the Hotel

Peng Retrieved from the Hotel

6/23/2015 Newark, CA n/a Empty package (dry run)
10/24/2015 Newark, CA n/a SD card
4/23/2016 Oakland, CA $20,000 SD card
7/1/2017 Columbus, GA $20,000 n/a
9/9/2017 Columbus, GA $10,000 SD card
6/30/2018 Columbus, GA $20,000 SD card

In the June 23, 2015, “dry run,” no information or money was exchanged.  Instead, an empty package was left by the source for Peng at the front desk of a hotel, and Peng later retrieved it.  In the first successful dead drop, Peng retrieved a package containing an SD card from the front desk of a hotel.  In each of the other four successful dead drops, Peng booked hotel rooms and left a room key to be picked up by the source.  Peng then left envelopes of cash in the room, retrieved a secure digital card left there by the source, or both.

In each instance in which he retrieved an SD card from the hotel room, Peng then traveled to Beijing, China, shortly thereafter.  The complaint further alleges that Peng was told by an MSS handler, in coded language, where and when to conduct the dead drops, how much money to leave in exchange for the SD cards, and when to return to China to deliver them.  As alleged in the Complaint, the FBI secretly filmed Peng conducting some of the dead drops, and intercepted Peng’s telephone conversations with his MSS handlers in China.

On Friday, Sept. 27, 2019, Peng was arrested at his residence in Hayward and made his initial appearance in federal court in San Francisco before U.S. Magistrate Judge Joseph C. Spero. Magistrate Judge Spero ordered Peng held without bond pending further proceedings. Peng’s next hearing has been scheduled for Oct. 2, 2019, at 10:30 am before the Honorable Jacqueline Corley, 450 Golden Gate Ave., 15th Floor, for a detention hearing and identification of counsel.

A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Peng faces a maximum sentence of 10 years, and a fine of $250,000 for acting as an agent of a foreign government without notifying the United States Attorney General in violation of 18 U.S.C. §  951.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division.  The prosecution is the result of an investigation by the FBI.

 

Feds Prepare States for Foreign Voting Interference

The Democrats have really lost their argument against voter ID if they are being fully candid about foreign interference. It is without question that several cities and states are victims of ransomware and Florida is especially concerned. Remember that a foreign actor, where clues point to Russia were able to gain access to voter registration databases and it stands to reason China will attempt the same.

Continually, the Democrats say that the Trump administration is virtually doing nothing to protect the election system. Read on as the Democrats know the mission and actions of the Cyber division of the Department of Homeland Security.

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As Reuters reports:

The U.S. government plans to launch a program in roughly one month that narrowly focuses on protecting voter registration databases and systems ahead of the 2020 presidential election.

These systems, which are widely used to validate the eligibility of voters before they cast ballots, were compromised in 2016 by Russian hackers seeking to collect information. Intelligence officials are concerned that foreign hackers in 2020 not only will target the databases but attempt to manipulate, disrupt or destroy the data, according to current and former U.S. officials.

“We assess these systems as high risk,” said a senior U.S. official, because they are one of the few pieces of election technology regularly connected to the Internet.

The Cybersecurity Infrastructure Security Agency, or CISA, a division of the Homeland Security Department, fears the databases could be targeted by ransomware, a type of virus that has crippled city computer networks across the United States, including recently in Texas, Baltimore and Atlanta.

“Recent history has shown that state and county governments and those who support them are targets for ransomware attacks,” said Christopher Krebs, CISA’s director. “That is why we are working alongside election officials and their private sector partners to help protect their databases and respond to possible ransomware attacks.”

A ransomware attack typically locks an infected computer system until payment, usually in the form of cryptocurrency, is sent to the hacker.

The effort to counter ransomware-style cyberattacks aimed at the election runs parallel to a larger intelligence community directive to determine the most likely vectors of digital attack in the November 2020 election, according to current and former U.S. officials.

“It is imperative that states and municipalities limit the availability of information about electoral systems or administrative processes and secure their websites and databases that could be exploited,” the FBI said in a statement, supporting the Homeland Security initiative.

CISA’s program will reach out to state election officials to prepare for such a ransomware scenario. It will provide educational material, remote computer penetration testing, and vulnerability scans as well as a list of recommendations on how to prevent and recover from ransomware.

These guidelines, however, will not offer advice on whether a state should ultimately pay or refuse to pay ransom to a hacker if one of its systems is already infected.

“Our thought is we don’t want the states to have to be in that situation,” said a Homeland Security official. “We’re focused on preventing it from happening.”

Over the last two years, cyber criminals and nation state hacking groups have used ransomware to extort victims and create chaos. In one incident in 2017, which has since been attributed to Russian hackers, a ransomware virus was used to mask a data deletion technique, rendering victim computers totally unusable.

That attack, dubbed “NotPetya,” went on to damage global corporations, including FedEx and Maersk, which had offices in Ukraine where the malware first spread.

The threat is concerning because of its potential impact on voting results, experts say.

“A pre-election undetected attack could tamper with voter lists, creating huge confusion and delays, disenfranchisement, and at large enough scale could compromise the validity of the election,” said John Sebes, chief technology officer of the ESET Institute, an election technology policy think tank.

The databases are also “particularly susceptible to this kind of attack because local jurisdictions and states actively add, remove, and change the data year-round,” said Maurice Turner, a senior technologist with the Center for Democracy and Technology. “If the malicious actor doesn’t provide the key, the data is lost forever unless the victim has a recent backup.”

Nationwide, the local governments that store and update voter registration data are typically ill-equipped to defend themselves against elite hackers.

State election officials told Reuters they have improved their cyber defenses since 2016, including in some cases preparing backups for voter registration databases in case of an attack. But there is no common standard for how often local governments should create backups, said a senior Homeland Security official.

“We have to remember that this threat to our democracy will not go away, and concern about ransomware attacks on voter registration databases is one clear example,” said Vermont Secretary of State Jim Condos. “We’re sure the threat is far from over.”