Fredericksburg Man Guilty of Trafficking Over $13 Million in Cigarettes

RICHMOND, Va. – Steven (Yinhau) Chen, 33, of Fredericksburg, pleaded guilty today to conspiring to commit money laundering to promote his cigarette trafficking operation.

In a statement of facts filed with the plea agreement, between March 2014 and June 2015, Chen, the owner of several Fredericksburg-area small businesses, purchased at least $13.8 million in cigarettes from area wholesale stores for the express purpose of re-selling those same cigarettes to individuals trafficking the cigarettes for eventual re-sale in, among other northern destinations, Pennsylvania and New Jersey.  Chen would subsequently launder the cash proceeds of these cigarettes sales through at least 20 different bank accounts that Chen and others maintained with at least 10 different banks.  Chen maintained these bank accounts in the names of both his legitimate businesses and another business entity that existed only to receive and subsequently transfer the cash proceeds of Chen’s cigarette trafficking conspiracy.  During the 15 months at issue, at least $12.18 million of cigarette trafficking proceeds flowed into and through Chen’s bank accounts before being repurposed to pay off the credit card bills Chen incurred purchasing bulk cigarettes.  The vast majority of Chen’s deposits were made in amounts just under the $10,000 Cash Transaction Report threshold established by Congress.  As part of the plea agreement, Chen agreed to forfeit $1.21 million as proceeds of the offense.

Chen was charged by superseding criminal information on Sept. 15, 2015. Chin faces a maximum penalty of five years in prison when sentenced on Dec. 18, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson.  The case was investigated by officers of the Washington – Baltimore HIDTA task force’s Northern Virginia Financial Initiative.  Assistant U.S. Attorney Thomas Garnett is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15cr153.

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