John Chen, 71, of the People's Republic of China (PRC) and Los Angeles, California, and Lin Feng, 44, a PRC citizen and resident of Los Angeles, California, pleaded guilty to acting as unregistered agents of the PRC and bribing an IRS agent in connection with a plot to target U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC.
According to court documents, from at least approximately January 2023 to May 2023, Chen and Feng worked inside the United States at the direction of the PRC government, including a PRC government official identified as PRC Official-1, to further the PRC's campaign to repress and harass Falun Gong practitioners. The PRC designated Falun Gong as one of the “Five Poisons,” or one of the top five threats to its rule. In China, Falun Gong adherents face a range of repressive and punitive measures from the Chinese government, including imprisonment.
As part of the PRC's campaign against Falun Gong, Chen and Feng engaged in a PRC government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (Entity-1). After Chen filed a defective whistleblower complaint with the IRS, Chen and Feng paid $5,000 in cash bribes and promised to pay substantially more to a purported IRS agent (Agent-1) who was, in fact, an undercover officer. This was done in exchange for Agent-1’s assistance in advancing the complaint. Neither Chen nor Feng notified the Attorney General that they were acting as agents of the PRC in the United States.
In the course of this scheme, Chen explicitly noted on a recorded call that paying these bribes was directed and funded by the PRC with an aim to “toppl[ing] . . . the Falun Gong.” During another call intercepted pursuant to a judicially authorized wiretap, Chen and Feng discussed receiving “direction” on the bribery scheme from PRC Official-1. They also talked about deleting instructions received from PRC Official-1 to evade detection and “alert[ing]” him if their meetings with Agent-1 did not go as planned. They further mentioned that this official was "in charge" of targeting Falun Gong through bribery.
As part of this scheme, Chen met with Agent-1 in Newburgh, New York on May 14, 2023. During this meeting, he gave Agent-1 a $1,000 cash bribe as an initial payment. He also offered $50,000 for opening an audit of Entity-1 and 60% of any whistleblower award if his complaint succeeded. On May 18, 2023, Feng paid Agent-1 another $4,000 cash bribe at John F. Kennedy International Airport.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division; U.S. Attorney Damian Williams for the Southern District of New York; and Executive Assistant Director Robert R. Wells of FBI’s National Security Branch made this announcement.
Chen pleaded guilty yesterday while Feng pleaded guilty today; both are scheduled for sentencing on October 30th and October 31st respectively. Each faces up to 25 years in prison pending consideration by a federal district court judge based on U.S. Sentencing Guidelines.
The FBI along with Office of Treasury Inspector General for Tax Administration are investigating this case.
Assistant U.S. Attorneys Qais Ghafary; Michael D. Lockard; Kathryn Wheelock for Southern District New York; Trial Attorney Christina Clark from Counterintelligence Export Control Section are prosecuting it.