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TYNGSBORO — A Westford man, charged with a Tyngsboro police officer with conspiracy to violate federal firearms laws, agreed to plead guilty to part of the firearm accusation and a new count …
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TYNGSBORO — A Westford man, charged with a Tyngsboro police officer with conspiracy to violate federal firearms laws, agreed to plead guilty to part of the firearm accusation and a new count of conspiracy to commit bank fraud for allegedly hiding a $6 million investment from a secret Chinese investor while applying for over $15 million in loans from local banks, according to court records.
Filings made in U.S. District Court in Boston by prosecutors — which recommend prison time — appear to implicate the local officer in the scheme.
Bin Lu, 49, a Chinese national living in Westford, and Daniel Whitman, 36, of Pelham, N.H. — a former president of the Tyngsboro Police patrolmans’ union — were arrested in early January in connection with alleged firearms violations at Hitman Firearms, a store Whitman owns and Lu invests in at 440 Middlesex Road, Tyngsboro.
The gun charge is based, in part, on allegations that Lu and Whitman conspired to convert a Sig Sauer MCX pistol owned by Hitman Firearms into a more highly regulated short-barreled rifle, which the store was not properly licensed to manufacture. The pistol was converted when Whitman added a folding stock to it, according to prosecutors.
Lu has now agreed to plead guilty to possessing that unregistered gun, which was in his possession when federal agents conducted searches connected to the probe.
The federal agents’ search of Hitman Firearms last year was the first time word of the investigation became known.
At the initial court appearance of the two men in January, Assistant U.S. Attorney Eugenia Carris told a federal magistrate that the firearms charge was only part of the investigation into Lu and Whitman, and that “There is a significant piece of this involving both defendants that involves dealings with China.”
At least part of that “significant piece” emerged in court documents this week, and it relates to another business Lu and Whitman are involved with in Tyngsboro — Freedom Alley Shooting Sports.
Freedom Alley Shooting Sports (FASS) was permitted by the town in 2016 to construct a roughly 36,000-square-foot gun range, store, and law enforcement training facility at 40 and 44 Cummings Road. Construction of the facility was started, but not completed before some of the required permits expired and the company defaulted on at least one loan.
The information — a type of federal court charging document — Lu agreed to plead guilty to says Lu and Whitman told the Lowell Five, Avidia Bank, and the U.S. Small Business Administration in separate loan applications that Whitman and a relative of Lu — referred to as “the sham owner” in court documents — each owned 50% of FASS.
But in reality, 79% of FASS was owned by a Chinese investor who signed an agreement with Lu and Whitman to provide up to $6 million in funding in exchange for the majority ownership stake, according to the information. That investor and his wife — referred to only as Y.M. and S.F. in court documents — have no residential ties to the U.S. and provided at least $4 million worth of that funding in 2017, just as Lu and Whitman were applying for over $15 million in loans, according to the information.
The information Lu agreed to plead guilty to says he and Whitman failed to disclose the true identity of FASS’ majority owner when they applied for a $6.5 million loan from the Lowell Five in August 2017; when they applied for a $3.7 million loan from the Small Business Administration via Avidia Bank in September 2017; and when they applied for a $5.34 million loan — along with a $250,000 bridge loan — from Avidia Bank in October 2017.
“In or about November 2017, CC-1 and Lu obtained the $250,000 Bridge Loan from Avidia,” the information states. “Shortly thereafter, CC-1 and Lu defaulted on that loan.”
In each instance, Lu and Whitman were legally required to reveal the majority owner. In the case of the SBA loan, anyone from outside the country owning more than 50% of the company would have disqualified the application, according to the information.
The plea agreement says prosecutors agreed not to charge Lu’s spouse or another of his relatives, but makes no mention of any agreements for Lu to testify against co-defendants.
While Co-defendant 1 (CC-1) is not named in the document, the individual is described as being a Pelham, N.H., resident, a Massachusetts police officer, and the owner and manager of Hitman Firearms — an unmistakable reference to Whitman, the owner of Hitman.
The agreement, which was signed by Lu; his attorney; Carris; and Dustin Chao, chief of the public corruption and special prosecutions unit at the U.S. Attorney’s Office in Boston, says Lu’s total “offense level” under federal sentencing guidelines will be 24, in part because of his guilty plea reducing the number.
According to
federal sentencing guidelines posted by the U.S. Sentencing Commission, an offense level of 24 would see Lu face at least 51 months in federal prison if he has no criminal record. The plea agreement says prosecutors will recommend the minimum sentence. It also includes a provision in which Lu agrees not to appeal any sentence of 51 months or less. The government is also seeking forfeiture of some of Lu’s property in order to recover losses suffered due to the case.
Lu’s attorney, Paul Kelly, did not immediately return a message seeking comment. The plea agreement says Lu intends to dispute a finding that the conspiracy caused over $9.5 million in losses. That finding led to a major increase in the amount of prison time Lu faces.
Whitman’s attorney, Oscar Cruz, declined to comment.
Lu is free on a secured $30,000 bond someone posted for him earlier this year. Whitman is free on a $20,000 unsecured bond, and remains on paid leave from Tyngsboro Police.
Tyngsboro Police Chief Richard Howe first placed Whitman on paid leave in August 2019 due to the federal investigation into his activities. Selectmen questioned the length of that suspension as they weighed a union grievance over the matter late last year, with Howe coming under fire during those hearings.
Howe wanted a harsher penalty for Whitman, but got push back from a majority of the Board of Selectmen.
Federal court records show no new activity in Whitman’s pending case since April, when a judge, over the objections of prosecutors, agreed to let Whitman take a “recreational” trip to Fort Myers, Fla., with friends. Whitman is not allowed to leave the New England states without permission from the federal court.
Whitman was one of three current and former Tyngsboro Police union officials investigated by the Middlesex District Attorney’s Office in connection with questions over whether the officials misspent police union money. That investigation was closed without charges being filed.
An internal police investigation into the matter was heavily criticized by Tyngsboro selectmen as they voted in executive session to return another of the officials, Lt. Shaun Wagner, to duty last week.
To download federal charging document detailing the allegations,
click here.
To download the plea agreement signed by Lu and prosecutors,
click here.