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Feds crack down on rhino-horn smuggling ring based in N.J.

The state of New Jersey served as a major hub in a multimillion-dollar international rhinoceros horn and elephant tusk smuggling ring, officials announced Thursday after the alleged mastermind of the racket appeared in federal court in Newark.

Zhifei Li, 29, of Shandong, pleaded guilty to 11 counts, with charges including conspiracy, smuggling, illegal wildlife trafficking and forging documents.

Li, the owner of antiques business Overseas Treasure Finding, admitted to selling 30 smuggled, raw rhinoceros horns to factories in China. There, they were allegedly carved into fake antiques and their leftover shavings sold for reputed medicinal purposes prosecutors branded bogus. Investigators said the horns fetched about $3 million - a staggering $17,500 per pound. Li allegedly procured 25 of from accomplices in New York and New Jersey and an additional five from Dallas.

U.S. Attorney Paul Fishman in a statement branded the sale of endangered wildlife "a multibillion-dollar illegal international market."

"As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade," Fishman said. "Zhifei Li's conviction is a warning to those who would be lured by the profits of dealing in cruelty."

Some of Li's trade in rhino horn allegedly came in the form of intricately-carved "libation cups." Drinking from the cups, which are prized by collectors, is a centuries-old tradition in China that some believe brings good health. But prosecutors said their escalating value has also helped fuel a thriving black market for recently-carved fake "antiques."

"The unparalleled greed of criminal trafficking rings like Li's fuel the poaching epidemic that is decimating rhinoceros populations in the wild," U.S. Fish and Wildlife Service director Dan Ashe said in a release.  

Li is also accused of over the past two years buying 60 carved elephant ivory items from U.S. auction houses and directing they be smuggled to him in China. Authorities estimate the market value of those items to be about $500,000.

In all, Li's network was responsible for smuggling $4.5 million worth of horn and tusk, according to the U.S. Attorney's Office.

According to court documents, Li financed three U.S. antique dealers' purchase of illegal wildlife items, negotiated the prices and gave them tips on the best way to smuggle the stuff out of the country. Officials said in some instances, he instructed the dealers to hide the tusks and horns in porcelain vases and declare them on custom forms as handicrafts or automobile parts. The packages were sent to Hong Kong, where co-conspirators allegedly helped them find their way to Li in mainland China.

Prosecutors said an investigation was first launched into Li's activities nearly two years ago, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike. The government-sourced horns were in turn sold to a Long Island City antiques dealer who worked for Li. That man, Qiang Wang, was two weeks ago sentenced to 37 months in prison for his role in the scheme.

Last January Li was arrested in Florida after allegedly meeting an undercover U.S. Fish and Wildlife Service officer in a Miami Beach hotel room and paying him $59,000 for two endangered black rhinoceros horns. Court documents state Li told the officer he was interested in purchasing more rhino horns and would buy "as much as the agent could find."

Officials said the wide-reaching investigation - dubbed "Operation Crash" - remains ongoing.

Li is required under the plea agreement to forfeit $3.5 million in criminal proceeds, as well as several Asian artifacts and ivory objects. He faces a maximum prison penalty of 10 years for each of the smuggling counts and 5 years for each other offense. Li's sentencing is scheduled for April.