Remarks as prepared for delivery
Good morning and thank you all for being here. Today, we are pleased to announce two indictments that mark a major milestone in our battle to stop deadly fentanyl from entering the United States. For the first time, we have indicted major Chinese fentanyl traffickers who have been using the Internet to sell fentanyl and fentanyl analogues to drug traffickers and individual customers in the United States.
These cases reflect a new and disturbing facet of the opioid crisis in America. More and more of our citizens are being killed by fentanyls, synthetic opioids that are often much stronger than heroin. A few grains of fentanyl can be a lethal dose. The Centers for Disease Control estimates that over 20,000 Americans were killed by fentanyl in 2016, and the number is rising at a dramatic rate. Fentanyl and fentanyl analogues are coming into the country in numerous ways, including shipments from factories in China directly to U.S. customers who purchased it on the Internet.
The President and Attorney General have made it clear that we will defeat the opioid crisis. The Department of Justice is playing a leading role in these efforts. In July, we announced charges against over 120 individuals for their roles in prescribing and distributing opioids and other dangerous narcotics. We also announced the takedown of the largest marketplace on the Darknet, where fentanyl and other deadly drugs were sold. We have created an Opioid Fraud and Abuse Detection Unit to pursue opioid-related health care fraud. We are aligning our resources and training to better target and prosecute opioid-related crimes. We recently announced $58.8 million in grant funding to combat the opioid epidemic. These are only a few of the ways that the Department is attacking the opioid crisis at every level.
Today we are announcing that two Chinese individuals have been indicted by grand juries in the Southern District of Mississippi and the District of North Dakota for separate conspiracies to distribute large quantities of fentanyl and fentanyl analogues into the United States. These are the first two China-based individuals designated as Consolidated Priority Organization Targets by U.S. law enforcement to be charged for violations of U.S. laws.
The first case began with a traffic stop in Mississippi in 2013 that unearthed a domestic drug ring selling synthetic cathinones and cannabinoids, sometimes referred to as “spice,” or “bath salts,” and delivering their illegal products via commercial parcel delivery services. During the successful investigation and prosecution of this group, federal investigators identified Xiaobing Yan, a distributor of a multitude of illegal drugs, including synthetic cathinones and cannabinoids, as well as synthetic opioids. Using different names and company identities over a period of at least six years, Yan operated websites advertising and selling acetyl fentanyl and other deadly fentanyl directly to U.S. customers in multiple cities across the country. Investigators also determined that Yan operated at least two chemical plants in China that were capable of producing ton quantities of fentanyl and fentanyl analogues. Yan 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. They intercepted packages mailed from Yan’s Internet pharmaceutical companies, seizing multiple kilograms of suspected acetyl fentanyl, potentially enough for thousands of lethal doses.
Yan was indicted in the Southern District of Mississippi on Sept. 7, 2017, on two counts of conspiracy to manufacture and distribute multiple controlled substances, including fentanyl, and seven counts of manufacturing and distributing the drugs in specific instances.
The second case began in January of 2015, when law enforcement agents in Grand Forks, North Dakota responded to the tragic fentanyl overdose death of an 18-year-old. Agents were able to identify another Grand Forks resident as the source of the fentanyl. This individual had been using the crypto-currency Bitcoin to buy fentanyl, heroin, and other drugs over the Internet for more than a year, using an encrypted website on the Dark Web. Dogged agents and prosecutors traced the source of the illegal drugs through Oregon, Canada, and eventually to Jian Zhang in China. They learned that Zhang ran an organization that manufactured fentanyl in at least four known labs in China, and advertised and sold fentanyl to U.S. customers over the Internet. Zhang’s organization would send orders of fentanyl and other illicit drugs, and pill presses, stamps, and dies used to shape fentanyl into pills, to customers in the United States through the mail or international parcel delivery services. Agents determined that Zhang sent many thousands of these packages since January 2013.
Zhang and eight others were indicted in the District of North Dakota on Sept. 20, 2017. The indictment charges a conspiracy to distribute fentanyl and fentanyl analogues in at least 11 states (North Dakota, Oregon, Florida, Georgia, North Carolina, New Jersey, California, South Carolina, Ohio, Colorado, Maryland, and elsewhere) in the United States between January 2013 and August 2016, a conspiracy to import the drugs into the United States from Canada and China, a money laundering conspiracy, an international money laundering conspiracy, and operation of a continuing criminal enterprise.
Fentanyl is sold in many forms in the United States, all of which are deadly. It can be purchased as pure fentanyl; fentanyl mixed with heroin, cocaine, or even marijuana; and fentanyl pressed into pill form and falsely sold as prescription opioids. Users often have no idea that they are ingesting fentanyl until it is too late.
Chinese fentanyl distributors are using the Internet to sell fentanyl directly to U.S. customers. They use multiple identities to disguise their activities and their shipments and to obscure the trail of profits going back to China. They take advantage of the fact that the fentanyl molecule can be altered in numerous ways to create a fentanyl analogue that is not listed as illegal under U.S. and Chinese law. When regulators are able to identify the new fentanyl and make it illegal, the distributors quickly switch to a new, unlisted fentanyl analogue.
We are working closely with our colleagues in China and other countries to stem the flow of illegal fentanyl into the United States. We are also moving aggressively to investigate and prosecute the suppliers of this poison to U.S. citizens. Both of the cases announced today result from coordinated, multi-agency, multi-national investigations conducted by agents and investigators of the Organized Crime Drug Enforcement Task Forces (OCDETF), and were further supported with national and international coordination led by the multi-agency Special Operations Division (SOD). OCDETF is a partnership between federal, state, local, and international law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
I particularly want to commend the Drug Enforcement Administration, Homeland Security Investigations, the Internal Revenue Service Criminal Investigation Division, the U.S. Postal Inspection Service, and the Royal Canadian Mounted Police for their incredible investigative work, as well as the Criminal Division’s Narcotic and Dangerous Drug Section, the U.S. Attorney’s Offices for the Southern District of Mississippi, North Dakota, and Oregon, and the Quebec office of the Public Prosecution Service of Canada. We also received valuable investigative assistance from the Ministry of Public Security of China and we want to thank them for their help.
Our dedicated investigators and prosecutors, working in close partnership with our international partners, are determined to shut down this deadly traffic and preserve the lives of our citizens.