FEDS INDICT 29 IN $325 MILLION COUNTERFEIT CHINESE SMUGGLING THROUGH U.S. PORTS
FRIDAY, MARCH 2, 2012
BY PETER J. SAMPSON STAFF WRITER
Federal authorities in New Jersey have charged 29 people, including a Palisades Park resident, and coordinated arrests from Texas to the Philippines in connection with international investigations that uncovered one of the largest counterfeit goods smuggling operations ever, U.S. Attorney Paul J. Fishman said Friday.
Charged in three federal complaints and an indictment, the defendants were accused of attempting to import $325 million worth of counterfeit Chinese goods — from Nike sneakers and Gucci handbags to Lacoste shirts — through Port Newark-Elizabeth, the largest container port on the Eastern Seaboard, over the past few years.
The investigations, in which undercover agents were paid nearly $3 million to facilitate the smuggling, resulted in the arrests of 20 people on Friday, adding to three others within the past two weeks, in New Jersey, New York, Florida, Texas and Manila, the Philippines, said Fishman, calling it “one of the largest counterfeit goods cases every prosecuted by the Department of Justice.”
Most of the defendants were from New York, but one man was from Bergen County: Dao Feng Shi, 35, of Palisades Park, was charged with conspiracy on one complaint for his alleged role in purchasing counterfeit goods.
Not only were knockoff footwear and clothing involved in the smuggling schemes, but counterfeit cigarettes and nearly pure crystal methamphetamine, Fishman said. Two of the targets were lured by investigators from Taiwan and mainland China to the United States and one was lured from Hong Kong to the Philippines so they could be arrested, he added.
“The success of this coordinated, multinational operation is a credit to the tremendous creativity, hard work and dedication of our nation’s law enforcement officers,” Fishman said.
The charges resulted from two parallel undercover operations, led by Immigration and Customs Enforcement’s Homeland Security Investigations unit and the FBI, that ultimately identified overlapping targets who were members of separate schemes, Fishman said. Officers from U.S. Customs and Border Protection also were involved in the investigations.
In one complaint, 16 defendants were charged in a three-year conspiracy to traffic in counterfeit goods. Fishman said they ran “a soup-to-nuts organization” that included shippers in China who used false paperwork, often in the names of real companies without authorization, and typically mislabeled the contents of containers to avoid higher tariffs.
In the states, some of the defendants allegedly paid $50,000 or more to an ICE undercover agent to get a container released quickly from the port.
During the sting, more than $2 million was funneled to the undercover agents to secure the release of 40 containers that had been placed on holds, the complaint said.
Once released, the containers allegedly were moved to warehouses where the goods were “processed” to make them look like legitimate brand-name articles; In one example, Fishman showed how boots were shipped with a counterfeit UGG brand label that was secretly hidden behind a no-name label that simply had to be pulled off by the processors.
From the warehouses, the goods allegedly passed to wholesalers and retailers, who sold them to consumers. Another group of conspirators wired the profits back to China in amounts small enough to avoid detection of the alleged smuggling scheme, according to authorities.
Authorities charged a dozen defendants in a separate complaint with importing more than 35 containers that shipped 100 tons of counterfeit goods, with a retail value of more than $47 million, since August 2008. The goods included Nike sneakers, UGG boots, Burberry, Louis Vuitton, Coach and Gucci handbags, cigarettes and other items.
To protect the smuggling operation, the defendants allegedly paid more than $900,000 to undercover agents who posed as the owners of a shipping company with “connections” at the port.
Authorities also charged three people in an alleged scheme to import more than 50 kilograms of crystal methamphetamine from Taiwan into the United States. During the probe, authorities allege, one kilogram of the drug was purchased from the defendants.
Email: sampson@northjersey.com
