MILITARY OFFICERS INVOLVED IN HUMAN TRAFFICKING AND

UNCLAS SECTION 01 OF 02 TAIPEI 001526

SIPDIS

DEPT PASS AIT/WASHINGTON
DEPT FOR INL/AAE AND EAP/TC
BEIJING PASS CHENGDU
HONG KONG FOR DHS

SENSITIVE

FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: SNAR KCRM ASEC TW TIP
SUBJECT: MILITARY OFFICERS INVOLVED IN HUMAN TRAFFICKING AND
LOAN-SHARKING SCANDAL

Sensitive but Unclassified - Please protect accordingly.


1. (SBU) Summary: A year-long investigation into a illegal
loan-sharking operation run by two Taiwan Army officers has
resulted in a number of arrests and revealed additional
involvement in prostitution, human trafficking and illegal
weapons sales, according to local prosecutors. Kaohsiung
prosecutors provided AIT/K with details of the charges, but
said the investigation continues and they anticipate further
evidence of the ring's involvement in a range of illegal
activities. End summary.


2. (SBU) Prosecutor Lo Shui-lang of the Kaohsiung
Prosecutors' Office confirmed to AIT/K on March 29 local
media reports of arrests of two Taiwan Army officers for
loan-sharking and other crimes. He noted that the arrests
had come after an investigation that had lasted over one
year. The investigation had begun in late 2003 after Tainan
authorities arrested a suspect for illegal possession of a
handgun in an arms sales investigation and the suspect had
confessed and provided information to a loan-sharking and
smuggling ring that involved military officers.


3. (SBU) The subsequent investigation had finally
identified Taiwan Army Major Chang Shou-chung as a leader of
the ring. Chang had opened pawnshops in southern Taiwan to
serve as fronts for underground illegal loans to his Army
colleagues as well as individuals in local criminal gangs.
Addition evidence indicated that Chang also had sold a
modified pistol and some bullets to another suspect, Taiwan
Army Captain Lee Yi-hung. Local law enforcement authorities
arrested Chang and Lee on March 27.


4. (SBU) Searches of Chang Shou-chung's residence turned up
account books which indicated that, in addition to the loan-
sharking operation, Chang was involved with smuggling rings
that trafficked foreign women for prostitution purposes.
While so far Chang has only admitted to involvement in one
case of trafficking women for prostitution, prosecutors
believe he was involved in many more. Chang admitted
involvement in one recent case in which three Mainland
Chinese women had been found engaging in prostitution and
had been repatriated to China. Confronted with evidence of
ties to this case, Chang had admitted that he had brought
the three to Taiwan using sham marriages, working with a
criminal in China named "Duan", and had forced the three
into prostitution. Chang said he had earned NT2,400 for
each customer the three women served. After police had
stumbled onto the women and sent them back to China, Chang
told prosecutors, he had had to reimburse the smuggling ring
NT 400,000 (USD 13,000) for losses.


5. (SBU) Chang and his cohorts are also being investigated
for involvement in illegal weapons sales. While conducting
a search at Captain Lee's residence, law enforcement
officials seized some stolen chambers and firing mechanisms
for M-16 rifles, which Lee claimed he had bought from Chang.
The military determined that the parts had been used in the
local manufacture of automatic weapons.


6. (SBU) Prosecutor Lo told AIT/K that the investigation
into all aspects of the cases continued. Lo said that the
cases were initiated by Tainan Police, but had been passed
to the Kaohsiung Prosecutors Office because the suspects'
residences and criminal activities took place in Kaohsiung.
Lo added that the cases of the two suspects have been split,
with Lee being handled by the Army's military justice system
and Chang, who was to retire on April 1, by the Kaohsiung
Prosecutor's Office. The split in the cases was because Lee
was active duty and, in addition to other charges, has been
charged with theft of military ammunition and weapons parts.
Chang, on the other hand, is primarily charged with illegal
loan sharking, trafficking in persons, and arms sales, all
of which would normally fall under the jurisdiction of
public prosecutors' offices.


7. (U) AIT/K will continue to follow developments in the
cases, especially with regard to organized trafficking in
persons.

Forden

Paal