Scam, Like A Nesting Doll, Hid Even More
Sunday, January 11, 2009
The small white bungalow on Backlick Road, near a major Fairfax County intersection, seemed like an unlikely spot for a sweatshop. But when police and federal agents burst in, they found several women hunched over industrial sewing machines, cranking out counterfeit designer clothing, working off the debt they owed for passage to America.
The astonishing discovery came during a two-year investigation into a Korean organized crime ring based in Annandale that trafficked in untaxed cigarettes. Undercover officers and agents started off making $5 million in sales of contraband cigarettes. That led to the crime ring's money laundering and numerous financial schemes. There was even a murder-for-hire plot.
A tip from an informant helped break open a criminal enterprise that stretched from Northern Virginia to New York City, according to court records in U.S. District Court in Alexandria. Seventeen people have been sent to federal prison.
Although their focus was untaxed cigarettes, police also uncovered the sweatshop, rampant identity theft and mortgage fraud. Concerned that the same tools could be used by terrorists, federal authorities are now looking for ways to plug those potential security gaps.
Lt. John Piper of the Fairfax police criminal intelligence division said that in 2006, police began investigating a possible Korean crime ring in Annandale. Police agreed to talk about the investigation, which is continuing, only after their major targets had been convicted.
"We could not crack it because the Korean community was afraid of these individuals," Piper said of the crime ring. "And their culture back home is they don't trust police. We got lucky with one individual wanting to turn over some information."
That informant, developed by Fairfax street officer Pat Dittmer, helped shut down the lucrative operation run by Jung Ho Cho. The 53-year-old Cho didn't wear flashy jewelry or run with a large entourage. He lived in a nondescript apartment in Ravensworth Towers near Columbia Pike in Annandale.
But when Cho and his associates walked into a restaurant or nightclub along Little River Turnpike, "you knew they had the respect of the community," Piper said. "People bowed when they walked in. These were definitely not street-level operators."
Concerned that Korean criminals would be suspicious of any Korean not already in their community, two white men -- an ATF agent and a Fairfax sheriff's deputy -- were tapped to be undercover operatives. Word spread that the two men were linked to a vast crime group, Special Agent Darin Ramsey said.
The goal was to set up large cigarette deals with Cho. Cigarettes are hugely profitable because they are taxed so heavily in New York City -- $4.25 a pack compared with 30 cents in Virginia. There is a cap on cigarette sales in Virginia, but agents put out the word that they could get cigarettes in bulk that could be sold with counterfeit tax stamps.
The cigarette tax loss to the states alone is enormous. "States are losing billions," ATF spokesman Mike Campbell said.
Before the agents could line up cigarette sales with Cho, they were approached by two other Korean entrepreneurs, court records show. Jong Woo Cha called an undercover Fairfax officer in October 2006 and said he and his partner, Jin Woong Lee, needed a firearm with a silencer -- a firearm "capable of killing someone," according to a court affidavit.