But the general's attorney said the case against Vang Pao was as flimsy as rice paper.
"The sting operation was grotesquely unfair and at worst took advantage of some gullible people," said John Keker, the general's San Francisco-based attorney. "It was manufactured by that agent."
The government's decision to drop Vang Pao's prosecution marked another escape for a storied war hero who defied bullets and dodged artillery on the battlefield.
After the communists conquered his homeland in 1975, Vang Pao fled with six wives and more than 20 children to the United States, his old ally in the CIA-backed "secret war" in Laos. He became the most recognizable leader of the Hmong in America, courted by congressmen, venerated by fellow immigrants. Elementary schools were named after him.
Vang Pao also survived numerous controversies, including allegations that charities he ran were strong-arming Hmong to give money for the Laotian insurgency that was instead used to support the globe-trotting lifestyle of the former general and his coterie.
Now, supporters say, the general is more revered than ever.
"He's viewed as a quasi-martyr," said Phillip Smith, executive director at the Center for Public Policy Analysis in Washington and Vang Pao's friend. "If these charges had remained, the government would have been putting itself on trial for betraying the Hmong."