TYNGSBORO — Tyngsboro Police Officer Daniel Whitman firmly said “not guilty” to each charge in a nine-count indictment alleging over $9 million in bank fraud and felony firearms charges in U.S. District Court Tuesday, just 90 minutes before his co-defendant pleaded guilty to two related charges in a deal that could see him spend over four years in prison.
Whitman, 36, who moved from Pelham, N.H., to Salisbury while the case was pending, pleaded not guilty at 10:30 a.m., as he was arraigned via Zoom before U.S. Magistrate Judge Page Kelley. Whitman has been free on $20,000 unsecured bond since his initial arraignment on two criminal complaints in January, but earlier this month a federal grand jury handed down a 9-count indictment containing far more serious charges.
Less than two hours after Whitman’s arraignment, co-defendant Bin Lu, 49, of Westford, pleaded guilty at noon to conspiracy to commit bank fraud and possession of an unregistered firearm before U.S. District Court Judge George A. O’Toole. Lu had already agreed to plead guilty before Whitman was formally indicted last week.
Lu’s guilty plea came as part of an agreement in which the government agreed not to prosecute Lu’s spouse or another relative who is not identified. The deal says prosecutors have calculated Lu’s “offense level” as 24, and that they agreed to seek the low-end of federal sentencing guidelines connected to that offense level.
According to tables posted online by the United States Sentencing Commission, an offense level of 24 makes Lu — if he has no prior criminal record — likely to be sentenced to 51 to 63 months in prison at his sentencing, which O’Toole scheduled for Nov. 10. The amount of alleged bank fraud involved in the conspiracy — calculated by prosecutors to be over $9 million — is a major factor in the offense level, and Lu plans to dispute it at sentencing, according to the plea agreement.
While Whitman’s indictment contains more charges, and more serious charges than those faced by Lu, the bank fraud allegations against both men are identical.
Whitman denies, but Lu admitted on Tuesday, that the two men hid that an unidentified Chinese investor owned 79% of Freedom Alley Shootings Sports, a business Lu and Whitman applied for about $15 million worth of loans for in 2017. Whitman denied, and Lu admitted Tuesday, that the men told banks they owned 50% of FASS while a relative of Lu’s owned the other 50%, when in fact Lu and Whitman owned only 21% of the company, while Lu’s relative owned none.
Freedom Alley Shooting Sports was granted permits 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.
Among the loans the men applied for was a $6.5 million loan from the Lowell Five, and a loan backed by the U.S. Small Business Administration that would not have been available to a company whose majority owner is not from the U.S., according to the indictment Whitman pleaded not guilty to and a criminal complaint Lu admitted to.
Lu pleaded guilty to possession of an unregistered firearm — a Sig Sauer MCX — that Lu told federal agents Whitman converted from a pistol to a short-barreled rifle by adding a collapsible stock to the gun, even though Whitman and his gun store, Hitman Firearms, 404 Middlesex Road, Tyngsboro, was not properly licensed to create or transfer short-barreled rifles.
Whitman also pleaded not guilty to several counts in the indictment that Lu was not charged with, including possession of two unregistered firearms, making a firearm in violation of the National Firearms Act, and transferring a firearm in violation of the National Firearms Act.
The indictment says Whitman also “made” a CMMG MK9 rifle Whitman purchased as just a lower stock, but allegedly combined with a barrel short enough to make it a short-barreled rifle, and two rifles that were turned over to law enforcement in Tyngsboro on the day of Whitman’s initial court appearance by someone identified only as “BUYER 1” in the indictment.
Whitman “made” those two rifles — a Stag 15 rifle and a Ruger AR rifle — and sold them to BUYER 1 in 2017 and 2019, while falsely recording the sales as rifle sales instead of short-barreled rifle sales, and while also failing to pay appropriate taxes on the manufacture and sale of the guns, or properly registering their manufacture and transfer with the U.S. Bureau of Alcohol, Tobacco and Firearms, according to the indictment.
Kelley warned Whitman in court Tuesday that he faces maximum penalties of up to 30 years in prison and over $1 million in fines if convicted.
Whitman posted an unsecured $20,000 bond after that initial court appearance in January, where he was also ordered not to travel outside of New England and to possess no guns in his home. He was allowed to vacation in Florida with friends last month over the objection of prosecutors. Prosecutors did not seek to change the conditions of Whitman’s release Tuesday despite his indictment.
Now that he has been indicted by a grand jury instead of merely charged in federal court, Whitman could be placed on unpaid suspension instead of paid leave, under Massachusetts law, but he would be entitled to back pay and benefits if he were not eventually convicted.
Tyngsboro Police Chief Richard Howe declined to comment on the indictment, but said he will soon make a recommendation to the Board of Selectmen regarding Whitman’s status. Selectmen recently blasted Howe for conducting an internal police investigation into allegations that Whitman, as well as two other union officials, misspent police union funds in an unrelated matter. Selectmen said that matter should have been handled internally by the town police unions.
Whitman’s attorney, Federal Public Defender Oscar Cruz, has repeatedly declined to comment on the case. Lu’s attorney, Paul Kelly, has not returned messages seeking comment.
Assistant U.S. Attorney Eugenia Carris told Judge Kelley “there is voluminous discovery” materials for prosecutors and the defense to exchange, so she suggested an extended time period before the next hearing in the case. Kelley agreed, and set the next hearing — a status conference — for Sept. 10.
“Thanks, your honor,” Whitman told Judge Kelley as she closed the proceeding.
To read Lu’s 7-page plea deal, click here or see below.
To read the 22-page indictment Whitman pleaded not guilty to, click here.