Feds accuse Tyngsboro Police officer of illegal production and sale of assault weapons, over $9M bank fraud

TYNGSBORO — A nine-count federal indictment handed down Wednesday accuses Tyngsboro Police Officer Daniel Whitman — a former patrolmans’ union president — of illegally manufacturing and selling assault weapons, while also conspiring to defraud local banks of over $9 million in loans for a shooting range whose secret majority owner is a so-far unidentified Chinese investor.

Whitman, 35, who was hired by Tyngsboro Police in 2010, has been on paid administrative leave since August of 2019. Last year, when The Sun broke news of a federal probe into Whitman, police Chief Richard Howe faced both a union grievance and criticism from Selectmen for keeping the officer on leave for so long.

Whitman’s alleged co-conspirator in the bank fraud and some of the gun charges, Bin Lu, 49, of Westford, has already agreed to plead guilty to a lesser federal criminal complaint. Despite agreeing to plead guilty to lesser charges than those faced by Whitman, Lu faces 51 months in federal prison, according to his plea agreement.

Whitman’s attorney, federal public defender Oscar Cruz, declined to comment on the case when contacted Thursday, as he has previously as well.

When Whitman was initially charged in U.S. District Court in Boston with an information alleging conspiracy to violate the National Firearms Act, Assistant U.S. Attorney Eugenia Carris, of the U.S. Attorney’s Public Corruption and Special Prosecutions Unit, said the investigation into Whitman and Lu was far more wide-ranging.

Whitman posted an unsecured $20,000 bond after that initial court appearance, where he was also ordered not to travel outside of New England and to possess no guns in his home. Prior to the indictment handed down Wednesday afternoon, there was no public activity in the case since January — save an order allowing Whitman to vacation in Florida last month over the objection of prosecutors.

The indictment handed down by a federal grand jury in Boston on Wednesday about 2 p.m. charges Whitman with conspiracy to commit bank fraud, making a firearm in violation of the National Firearms Act, Transferring a firearm in violation of the National Firearms Act, and two counts each of bank fraud, making false statements to a bank, and possession of an unregistered firearm.

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.

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.

The bank fraud allegations contained in the indictment are identical to those Lu has signed an agreement to plead guilty to, but the firearms charges in Whitman’s indictment are far more wide-ranging than those faced by Lu.

The gun charges focus on Whitman’s gun store, Hitman Firearms, at 404 Middlesex Road in Tyngsboro. The indictment says Whitman and Lu promoted Hitman as a store that sold guns, modified guns to create short-barreled rifles — that the store was not licensed to produce — and marketed “firearms training to customers, including customers that were foreign nationals.”

The charges Whitman is indicted on focus on four guns, each of which easily fits within vague and unofficial definitions of assault weapons.

The guns are a Sig Sauer MCX pistol, that Whitman allegedly converted into a short-barreled rifle by adding a collapsible stock; a CMMG MK9 rifle Whitman purchased as just a lower stuck, 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 rifles 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.

The bank fraud allegations center around both Lu and Whitman claiming to own half of Freedom Alley Shooting Sports along with an unidentified relative of Lu, when in reality a Chinese investor and his wife — who are identified in court records only by their initials — owned 79 percent of the business, with Whitman and Lu owning just 21 percent, according to the indictment. The Chinese investors provided over $4 million of an agreed total of $6 million before Whitman and Lu applied for over $15 million in loans for FASS, according to prosecutors.

Freedom Alley Shooting Sports 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.

Lu agreed to plead guilty to failing to disclose the Chinese majority owner of FASS while applying for a $6.5 million loan from the Lowell Five in August 2017; a $3.7 million loan from the Small Business Administration via Avidia Bank in September 2017; and a $5.34 million loan — along with a $250,000 bridge loan — from Avidia Bank in October 2017. Whitman and Lu obtained the bridge loan in November of 2017, and defauled on it “shortly thereafter” according to the indictment.

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 prosecutors.

Lu is scheduled to appear in U.S. District Court in Boston for a change of plea hearing on Tuesday. No new court appearances for Whitman were scheduled as of Thursday morning, according to online federal court records.