Woman gets 366 days in prison

The federal court handed down a one-year-and-one-day sentence against a woman who used a jewelry store inside the defunct Tinian Dynasty Hotel & Casino as a front for an unlicensed money transmitting business from 2014 and 2015.

Hong Mei Xu was given credit for one day of time served. Upon completing her sentence, she will be placed on two years of supervised release.

She will be required to perform 50 hours of community service and pay a $100 special assessment fee.

Among the conditions of her supervised release is that Xu shall report to an immigration official to determine if deportation is appropriate.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona noted that Xu has been in the CNMI for 20 years now and has a 14-year-old U.S. citizen daughter.

The judge noted that although Xu has no prior criminal conviction, she has a lot of traffic cases for traffic violations that started in 2000 and continued in 2016. A Superior Court bench warrant was issued against Xu for a traffic case.

There is a criminal matter in 2001 and another criminal case filed in Superior Court seven years ago, but the matter did not result in convictions or sentence, Manglona said

The judge said that Xu, a Chinese national, could have the possibility of staying with her U.S. citizen daughter in the CNMI or U.S. in the future, but she jeopardized all of that with her conduct.

Manglona said that Xu came to the CNMI as guest worker—a privilege and not a right.

“You have violated this country’s law,” Manglona told Xu. “It is unfortunate that you have to pay the price for committing a crime.

Assistant U.S. attorney James Benedetto had recommended a 12-month prison term.

Colin Thompson is counsel for Xu.

Xu was arrested by federal agents on Saipan on Aug. 12, 2016. She pleaded guilty on Dec. 9, 2016.

According to a statement from the U.S. Attorney’s Office, Xu managed an unlicensed money transmitting business at the TDHC under the pretense of being a jewelry store. Customers would enter the store and purportedly buy jewelry with their UnionPay International credit card. In reality, the customers would not receive any merchandise, only a receipt, which they would redeem for cash, minus Xu’s 5-percent commission. Customers then used the cash to gamble at the Dynasty casino. The purchase transactions were transmitted to UnionPay International Bank, allowing the customers to avoid China’s strict capital flight restrictions.

Xu’s name and contact information was prominently displayed on a placard at the entrance of the jewelry store. The sign advised potential clients to contact her if they wanted to exchange or transmit money.

During the federal investigation, agents searched the store to obtain financial transaction records. Agents discovered merchant card transaction slips totaling $501,800.11 for the period of Nov. 22, 2014, through Aug. 3, 2015.

Xu performed at least 50 of these illegal money transmissions in which a customer was charged a commission fee.

Xu later disclosed to agents that the business was not licensed as a money transmitting business and that she would run customers’ credit cards in exchange for U.S. currency.

Acting U.S. attorney Anderson said: “Federal law requires certain money services businesses to register with the Financial Crimes Enforcement Network. Registration enables the government to monitor and enforce compliance with financial regulations. These regulations are important to deterring money laundering and terrorist financing, within our homeland and abroad. Our office will continue to pursue criminal prosecutions and civil monetary penalties against those who fail to register as MSBs and choose to operate in the shadows of our financial system.”

Additional guidance can be found at www.fincen.gov.

Special agents from the Internal Revenue Service conducted the investigation. Benedetto was assisted in the case by assistant U.S. attorney Russell Lorfing.