The masterminds of an international rhinoceros horn smuggling ring pleaded guilty in a Los Angeles federal court to illegal wildlife trafficking, money laundering and tax evasion.
The pleas Friday wrapped up the first phase of a nationwide crackdown on the lucrative horn trade to Asia.
Vinh Chuong "Jimmy" Kha and Felix Kha, who have been jailed since their homes and import-export business in Garden Grove and Westminster were raided in February, probably face about five more years in prison under a plea agreement with federal prosecutors.
The father-son team will forfeit more than $2.5 million in smuggling profits, including cash, gold ingots, diamonds, jewelry and gold Rolex watches. Jimmy Kha, 50, agreed he also owed $76,000 in back taxes for unreported income in 2009 and 2010. Felix Kha, 27, owes the Internal Revenue Service nearly $110,000 for those two years, according to court documents.
The duo were central figures in an organized ring of wildlife traffickers buying up old rhino horn trophies, mounted heads and other rhino body parts to be smuggled out of the United States, Assistant U.S. Atty. Joseph O. Johns told the judge. Johns, chief of the environmental crimes section, said the network paid $5,000 to $7,000 a pound for the horns in the United States and sold them for far more in Vietnam and China, where the horns fetch higher prices than gold or cocaine. Many people there believe the pulverized horns can cure cancer.
Traditional Chinese medicine authorities dispute that rhino horn keratin — similar to what creates hoofs, nails and hair — has such curative powers. Yet some in Asia's emerging wealthy class pay as much as $25,000 a pound for the horns so they can bestow upon relatives and business associates what they consider "the gift of life," trafficking experts say.
Soaring prices have led to an epidemic of poaching of rare and endangered rhinos in Africa and led to chain-sawing the horns off mounts in private homes and public museums.
Evan Phillip Freed, defense attorney for Jimmy Kha, said the horns collected by his clients were antiques or old trophies sold at auction — legal so long as they are not transported across state lines. "They were relics, old trophies," he said, "not from newly killed rhinos, bleeding from the bone."
Yet his client and others admitted in federal court that they knew it was illegal to transport such items across state lines or out of the country. Jimmy Kha paid a $150,000 bribe in 2011 to customs officials in Vietnam, court records show.
"Horn trafficking of any type fuels demand for this material and encourages rhino poaching in Africa and Asia," said Dan Ashe, director of the U.S. Fish and Wildlife Service. "All of this further imperils species that are already at risk of extinction."
Rhino populations have plummeted by 90% since 1970. Rhino horn has long been banned by international convention — enforced in the U.S. by the Endangered Species Act and the Lacy Act.
Jimmy and Felix Kha each pleaded guilty to five felonies and will be sentenced Dec. 10. Win Lee Corp., Jimmy Kha's import-export business, faces fines up to $1 million. At least three other defendants in the smuggling ring have pleaded guilty to related crimes.
Edward Grace, the wildlife service's deputy chief of law enforcement, said a federal task force will continue its investigation in 26 states.