While New Yorkers were gasping for N-95 masks and latex gloves in the dark spring of 2020, the woman once tasked with “diversity, equity & inclusion” inside the Hochul-Cuomo political machine was allegedly busy funneling state contracts to her own relatives—and pocketing the profits.
The Gateway Pundit reported last year that the FBI conducted a pre-dawn raid on the $3.5 million Long Island home.
The lavish five-bedroom home, located in a gated community called Stone Hill in Long Island, was searched thoroughly by agents, though it remains undisclosed whether any items were seized during the operation.
A federal grand jury has returned a second superseding indictment against Linda Sun, former Director of Diversity, Equity & Inclusion for New York and later Deputy Chief of Staff to Gov. Kathy Hochul, along with her husband Christopher “Chris” Hu.
Prosecutors say the pair raked in more than $8 million in kickbacks, bribes and laundered cash by steering COVID-19 personal-protective-equipment (PPE) contracts to companies run by Sun’s cousin and Hu’s business partner.
The new counts include honest-services wire fraud, conspiracy, bribery, money-laundering, and—just for good measure—tax evasion for Hu. Arraignment is set for Monday, June 30 in U.S. District Court for the Eastern District of New York.
More from DOJ:
A federal grand jury in Brooklyn yesterday returned a second superseding indictment that added charges against Linda Sun and her husband and co-defendant Chris Hu related to a fraudulent scheme involving procurement of personal protective equipment (PPE) by the New York State (NYS) government at the start of the COVID-19 pandemic.
As part of the scheme, Sun steered contracts to vendors with whom she had undisclosed personal connections, and she and Hu received millions of dollars from the vendors, including some in the form of kickbacks, which Sun did not disclose to the NYS government. The new charges against Sun and Hu include honest services wire fraud, honest services wire fraud conspiracy, bribery, and conspiracy to defraud the United States. Additionally, Hu is charged with tax evasion.
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“As alleged, Linda Sun not only acted as unregistered agent of the government of the People’s Republic of China, but also enriched herself to the tune of millions of dollars when New York State was at its most vulnerable at the start of the COVID-19 pandemic,” stated United States Attorney Nocella.
“When masks, gloves, and other protective supplies were hard to find, Sun abused her position of trust to steer contracts to her associates so that she and her husband could share in the profits. We demand better from our public servants, and this Office will continue to hold accountable public officials who enrich themselves at the expense of the New York taxpayers.”
Mr. Nocella expressed his appreciation to the Department of Justice’s National Security Division, the New York State Office of the Inspector General, the New York State Police, and the U.S. Department of State’s Diplomatic Security Service (DSS) for their work on the case. He also thanked the New York State Executive Chamber for its cooperation with the investigation.
“During a global pandemic, Linda Sun allegedly leveraged her authority within the New York State government to secretly steer contracts to selective PPE vendors in exchange for millions of dollars in kickbacks to her and her husband,” stated FBI Assistant Director in Charge Raia.
“This alleged scheme not only created an unearned and undisclosed benefit for the defendants and their relatives, but it also exploited the state’s critical need for resources in a health crisis. The FBI will never tolerate any public official who abuses their position to profit at the expense of others, especially when their objectives align with foreign agendas.”
“Not only did Sun allegedly use Chinese money and her influence in New York State to benefit the Chinese government, it is further alleged that she used her position to steer multi-million-dollar contracts to companies controlled by family members and friends. With this investigation, this husband-and-wife team with supposed ties to corruption has been rooted out, and they will soon understand that in legitimate government spending, there is no friends and family discount,” stated IRS-CI New York Special Agent in Charge Chavis.
As alleged in the superseding indictment, at the outset of the COVID-19 pandemic and while working with the team of NYS government employees responsible for obtaining PPE, Sun used her position of influence with the government of the People’s Republic of China (PRC) to coordinate the NYS government’s purchase of PPE from vendors located in the PRC.
In addition to certain vendors referred by the PRC government, Sun referred two vendors (the Cousin Company and the Associate Company) that were not recommended by the PRC government but rather had ties to Sun and Hu, while claiming falsely that these, too, were referrals from components of the PRC government.
In reality, the Cousin Company was operated by one of Sun’s second cousins, and the Associate Company was operated by Hu and one of Hu’s business associates. With Sun’s assistance, the Cousin Company and the Associate Company each entered into multiple contracts with the NYS government worth millions of dollars apiece.
Sun, the Associate Company, and the Cousin Company did not disclose to the NYS government (1) the fact that Sun and Hu had relationships with the Associate Company and the Cousin Company, or (2) that Sun and Hu received a portion of the profits that the Associate Company and the Cousin Company made as a result of their contracts with the NYS government for PPE, including through kickback payments from the Cousin Company.
To conceal her relationship with the Cousin Company from procurement authorities at the NYS government, Sun falsified a document to suggest that the Jiangsu Department of Commerce had recommended the Cousin Company.
On or about March 20, 2020, Sun and other NYS government officials received an email from the U.S. representative to the Jiangsu Trade & Business Representative Office in Albany, New York suggesting four PRC-based vendors who were able to provide PPE for the NYS government.
On or about March 21, 2020, Sun forwarded herself an altered version of the email in which she replaced the first suggested vendor—a vendor that produced ventilators—with the Cousin Company and wrote that the Cousin Company was recommended by the Jiangsu Department of Commerce.
On or about March 24, 2020, in an email with the subject line “Already VERIFIED by Linda Sun,” Sun wrote to NYS procurement officials that the Cousin Company “came recommended by Jiangsu Chamber of Commerce,” that the representative had helped “screen potential vendors,” and that the Cousin Company’s surgical mask was the “gold standard.”
Below Sun’s message was what purported to be quoted text from the Jiangsu Chamber of Commerce’s email recommending vendors. However, the email in the quoted text was the altered email.
In connection with the Cousin Company contracts with the NYS government, a spreadsheet maintained on Sun and Hu’s personal computer indicated that the Cousin provided payments to Hu (and Sun) totaling approximately $2.3 million during 2020 and 2021.
These kickbacks from the Cousin Company represented taxable income. Hu did not report these payments as income to the U.S. government, as required, or pay taxes on this income in Forms 1040 for 2020 and 2021 that he filed on behalf of himself and Sun.
In part, Hu laundered the income from the Cousin Company by having the Cousin make $1.5 million in payments in three $500,000 increments from another entity that the Cousin owned (the Cousin Entity) to U.S. accounts at a financial institution. Hu created these accounts in a close relative’s name instead of his own on April 29, 2020, two days before the final $6 million payment from NYS government to the Cousin Company.
Sun also arranged for the Associate Company to be a vendor for NYS government contracts. On March 14, 2020, Sun wrote an email with the subject “Mask suppliers” to other members of the NYS government PPE task force with procurement authority and listed the Associate Company as a potential supplier.
Sun subsequently communicated with the Associate Company by email to obtain a price quote for the contract and provided a status update to the NYS government about the contracts with the Associate Company.
A computer owned by the defendants contained a NYS internal document tracking various state PPE contracts, broken out by vendor. One of the fields in the document contained, for each company, an answer to the question “why did we do business with this vendor?”
For the Associate Company, the answer to the question was listed as: “referred by Chinese chamber of commerce.” However, there was no such referral for the Associate Company.
According to a spreadsheet found in one of Hu’s electronic accounts, the total profits Hu expected to reap from the contracts that the Associate Company and the Cousin Company had with the NYS Department of Health totaled $8,029,741. Hu marked the column for these expected profits with the word “me.”
The new charges are in addition to the existing charges against Sun, which include violating and conspiring to violate the Foreign Agents Registration Act, visa fraud, alien smuggling, and money laundering, and the existing charges against Hu, which include money laundering conspiracy, money laundering, as well as conspiracy to commit bank fraud and misuse of means of identification.
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