Former Chinese Diplomat and Head Of U.S. Operations For Chinese Construction Business Convicted Of Engaging In Forced Labor And Related Charges By A Federal Jury
Defendant Exploited Laborers Performing Construction Work in the New York City Metropolitan Area
On Friday, March 22, 2019, following a three-week trial, a federal jury in Brooklyn returned a guilty verdict on all five counts against Dan Zhong, the head of U.S. operations of Chinese Liaoning Rilin Construction (Group) Co. Ltd. (also known as China Rilin) and U.S.-based subsidiaries, including U.S. Rilin, who was formerly a diplomat of the People’s Republic of China (PRC). The counts of conviction were conspiracy to provide forced labor, providing and benefitting from forced labor, concealing passports and immigration documents in connection with forced labor (also known as document servitude), conspiracy to commit alien smuggling and conspiracy to commit visa fraud. The jury also found as a sentencing enhancement that Zhong engaged in the alien smuggling for commercial gain. Today, the jury separately concluded that six properties where the forced labor victims worked, including a high rise building in midtown Manhattan and a mansion on Long Island, are forfeitable. Zhong’s co-defendant in the indictment, Landong Wang, is a fugitive, believed to be in the PRC.
When he is sentenced by United States District Judge Ann M. Donnelly, Zhong faces up to 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Angel M. Melendez, Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (HSI), New York, and Timothy W. Dumas, Special Agent-in-Charge, New York Field Office, Diplomatic Security Service, U.S. Department of State (DSS), announced the verdict.
“Unlike Chinese Communist elites, Americans do not practice, condone or tolerate forced labor,” stated United States Attorney Donoghue. “Mr. Zhong, a former long-time PRC diplomat, believed he could oppress and coerce Chinese construction workers in New York, forcing some to work for years without pay under the threat of physical harm and financial ruin. His crimes not only violate our laws, they contradict the values of this country.” Mr. Donoghue expressed his appreciation to the Department of State’s Office of Foreign Missions and the FBI’s Field Office in Newark, New Jersey, for their assistance on the case.
“These are human beings, forced to work seven days a week with no pay and forced to live in squalid housing with dozens of others, trapped by guards who would hunt them down and drag them back if they escaped,” stated FBI Assistant Director-in-Charge Sweeney. “This didn’t take place in a foreign country, this happened here in Manhattan, on Long Island and New Jersey. No human being deserves to be treated this way, in any country. Mr. Zhong and others may have believed they could get away with human trafficking and forced labor in this country because of the Chinese government’s disregard of the laws where it operates, but they will now face justice for their crimes.”
“With the hopes of attaining the proverbial American dream, victims were brought to the U.S. by Zhong, only to be forced to live in cramped, unsafe conditions, with locks on the doors so they could not escape,” stated HSI Special Agent-in-Charge Melendez. “Many worked 14 hour days for years, submitting to threats of financial ruin to their families or threats of violence. Forced labor simply put is modern day slavery and this investigation shed light on the willingness of criminals to exploit people for personal financial gain. We will seek prosecution of anyone who looks to increase their profit by forcing people to work with no pay.”
“This case illustrates the global reach of the Diplomatic Security Service and the effectiveness of federal agency collaboration to stop criminals from illegally obtaining U.S. visas to exploit foreign workers,” stated DSS Special Agent in Charge Dumas. “We’re committed to investigating visa fraud committed by U.S. business operators and others who facilitate criminal visa applications at U.S. Embassies and Consulates around the world.”
The evidence at trial established that Zhong’s company performed construction work on a variety of PRC government facilities in the United States, including the Permanent Mission of the PRC to the United Nations, the Embassy of the PRC to the United States, and PRC Consulates General in the United States (collectively, the PRC Facilities). Initially, Zhong, and his co-conspirators required workers to turn over substantial “security deposits,” including the deeds to their family homes that were subject to forfeiture if they refused to work as a key element of “debt bondage” contracts the workers signed. Once in the United States, the workers also had to surrender their passports to the conspirators. The workers were forced to put in 14-hour days, seven days a week, for years without receiving any pay. Twenty or more workers were housed in one and two-family houses in Jersey City, New Jersey. Inspections of some of these houses revealed numerous fire code violations, as well as illegal locks to prevent the workers from escaping. Through this scheme, Zhong and his co-conspirators attempted to prevent escape by the workers, at times using violent force. Several workers testified about their families being threatened and forced out of their homes in the PRC by Rilin. One worker testified that after escaping and being re-captured, he was warned that his legs would be broken if he again tried to escape. More recently, Zhong and his co-conspirators abused the legal process in the PRC by photographing a worker and his wife in front of a pile of cash totaling RMB1 million belonging to Rilin and then obtaining from a PRC court an enforcement order against the worker’s wife for RMB1 million after the worker escaped.
Although the visa applications prepared for the workers provided that the workers would work only at PRC diplomatic facilities, the evidence at trial established that Zhong and his co-conspirators forced them to work on private construction projects, including a commercial building in midtown Manhattan and private residences in Queens and elsewhere on Long Island. Zhong also used these workers as personal servants, preparing meals, chauffeuring him, and performing yard work.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Ian C. Richardson and Craig R. Heeren are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian Morris of the Office’s Civil Division, which is responsible for the forfeiture aspect of the case.
Livingston, New Jersey
E.D.N.Y. Docket No. 16-CR-614 (AMD)