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California senator, alleged mobsters netted in American Hustle-style FBI sting

Call it “American Hustle” gone West. An elaborate FBI sting culminated this week after two undercover officers -- who posed as East Coast Mafia members -- helped take down 26 Californians, including an influential state senator with alleged ties to an Asian mob.

State Sen. Leland Yee, an outspoken Democrat who is a gun control and open government advocate, was arrested Wednesday on charges he conspired to traffic in firearms and traded favors in Sacramento for bribes. He was allegedly taking bribes from men who turned out to be FBI agents.

Yee, who was running for secretary of state and currently represents half of San Francisco, was being held on $500,000 bail after appearing handcuffed and shackled in federal court. He reportedly withdrew from the secretary of state race on Thursday. 

He was charged with six counts of depriving the public of honest services and one count of conspiracy to traffic in guns without a license. 

The criminal complaint contained dramatic details about Yee's alleged efforts to connect an undercover agent with a firearms dealer. It described a January 2014 meeting where the senator told the agent that the arms business was not for "the faint of heart." The arrangement developed, with Yee and others allegedly working to connect the agent with high-powered weapons -- including shoulder-fired missiles and automatic weapons -- from a Muslim rebel group in the Philippines. 

"Do I think we can make some money? I think we can make some money," the senator allegedly said in one of the meetings. 

The deal was supposedly worth between $500,000 and $2.5 million. 

Despite his stances on gun control, Yee allegedly described himself as "agnostic" in these dealings. 

"People want to get whatever they want to get. Do I care? No, I don't care. People need certain things," he said, according to the complaint. 

Court documents say he was just one of more than two dozen people caught up in the five-year federal probe. Initially, agents were interested in going after Raymond “Shrimp Boy” Chow, a notorious gangster who ran a Chinese criminal organization with ties to Hong Kong.  

According to the FBI’s 137-page complaint, Chow and five other defendants laundered $2.3 million for undercover agents between March 2011 and December 2013. According to the FBI, the defendants were told the money came from crimes like illegal gambling, drug dealing and marijuana growing.

Chow, who was previously convicted on gun charges, was recently celebrated by the Chinese community in the area as an example of successful rehabilitation. He has been praised in recent months for his work in the immigrant-heavy community.

Most of the suspects netted in the FBI investigation are linked to the Chinatown brotherhood association that Chow heads known as Ghee Kung Tong. The group’s headquarters were raided Wednesday and members were charged with trafficking in illicit guns, liquor and cigarettes.

The FBI report says undercover agents infiltrated the Chow’s group so effectively that one agent, while posing as a member of La Cosa Nostra, was “inducted” as a consultant.

Mark Hedlund, spokesman for Senate President Pro Tem Darrell Steinberg, confirmed that the FBI searched Yee's office on Wednesday.

Steinberg said he had no comment and did not know anything about the investigation.

Yee is the third Democratic senator to face charges this year. Sen. Rod Wright was convicted of perjury and voter fraud for lying about his legal residence in Los Angeles County, and Sen. Ron Calderon has been indicted on federal corruption charges. Wright and Calderon are taking a voluntary leave of absence, with pay, although Republicans have called for them to be suspended or expelled from the Legislature.

He is best known publicly for his efforts to strengthen open records, government transparency and whistleblower protection laws, including legislation to close a loophole in state public records laws after the CSU Stanislaus Foundation refused to release its $75,000 speaking contract with former vice presidential candidate Sarah Palin in 2010.

Yee's arrest came as a shock to Chinese-Americans who see the senator as a pioneering leader in the community and a mainstay of San Francisco politics, said David Lee, director of the Chinese American Voters Education Committee.

"People are waiting to see what happens, and they are hoping for the best, that the charges turn out not to be true," said Lee, whose organization just held a get-out-the-vote event with Yee and other Chinese-American elected officials last week.

For his efforts to uphold the California Public Records Act, Yee was honored last week by the Northern California chapter of the Society of Professional Journalists, which awarded him its public official citation for his efforts last year to maintain the requirements of the California Public Records Act.

Yee has at times clashed with fellow Democrats for casting votes of conscience, refusing to support the Democratic budget proposal in 2011 because of its deep cuts to education, social services and education. He also opposed legislation by a fellow Democrat, Assemblyman Paul Fong of Cupertino, that banned the sale of shark fins used for Chinese shark fin soup, saying that it unfairly targeted the Chinese-American community.

Yee served in the California Senate since 2006 and his district represents both San Francisco and San Mateo County. He previously was a member of the California Assembly, and is the first Chinese American elected to the California State Senate.

Yee is among three Democrats running this year for secretary of state, the office that oversees elections and campaign finance reporting. He lost a bid for mayor of San Francisco in 2011.

A man was charged last year for threatening Yee over legislation that he proposed to limit rapid reloading of assault weapons. The bill would have prohibited the use of devices that allow users to swiftly reload military-style assault weapons. Lee also authored legislation that that would have required the state to study safe storage of firearms.

Chow acknowledged in an unpublished autobiography that he ran prostitution rings in the 1980s, smuggled drugs and extorted thousands from business owners as a Chinatown gang member, KGO-TV reported two years ago.

In 1992, Chow was among more than two-dozen people indicted on racketeering charges for their alleged involvement in crimes ranging from teenage prostitution to an international drug trade mostly involving heroin.

He was later convicted of gun charges and sentenced to 25 years to life in prison. He spent 11 years in prison and was released in 2003 after he cut a deal with the government to testify against another high-ranking associate, Peter Chong. Chong was later convicted of racketeering.

But Chow told KGO-TV in a 2012 interview that he had changed and was working with at-risk children in San Francisco.

U.S. Sen. Dianne Feinstein of California issued a statement in 2012 recognizing Chow as a former offender who had become an asset to his community, the Sacramento Bee reported. Chow was also praised by San Francisco Mayor Ed Lee for his "willingness to give back to the community," the Bee reported.

Fox News' Michael Lundin and The Associated Press contributed to this report.