Feds Bust $200 Million Counterfeit Ring at Los Angeles, Long Beach Ports

Yahoo

28-01-2025

Nine people have been charged in connection with a scheme to smuggle at least $200 million worth of counterfeit and other illegal goods from China into the U.S. via the San Pedro Bay port complex of Los Angeles and Long Beach.
A 15-count indictment levied by the U.S. Attorney's Office, unsealed on Friday, charges nine defendants with conspiracy, smuggling and breaking customs seals. The scheme took place from at least August 2023 to June 2024, the statement read.
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During the investigation, law enforcement seized more than $130 million in unspecified contraband, but authorities believe the true value of smuggled product throughout the ring to be north of $200 million. According to the indictment, a search of one warehouse used by the group led to the June 2024 seizure of $20 million worth of counterfeit items including shoes, perfume, luxury handbags, apparel and watches.
The defendants allegedly took containers flagged for off-site secondary inspection by U.S. Customs and Border Protection (CBP), unloaded the contraband, then stuffed the targeted containers with filler cargo to deceive customs officials and evade law enforcement.
'It was a team of CBP agriculture specialists assigned to the Los Angeles/Long Beach seaport who in 2023, during a routine examination of a container made the initial discovery,' said Cheryl Davies, director of field operations in Los Angeles for the CBP. 'This case attests to their unwavering vigilance, upmost professionalism and keen focus in protecting the integrity of lawful trade, a key component of our critical national security mission.'
According to the CBP, the specialists noticed that the security seal appeared to have been tampered with and that the cargo inside did not match what was on the shipping manifest.
Prosecutors said the counterfeit security seals are used to deceive customs officials and were also shipped to the U.S. from China.
According to U.S. CBP spokesperson Jaime Ruiz, the charges involve the largest trade fraud on record at the Los Angeles-Long Beach port complex.
To date, law enforcement has seized more than $1.3 billion worth of counterfeit goods associated with this and similar seal-swapping schemes.
'Secure seaports and borders are critical to our national security,' said acting United States Attorney Joseph McNally. 'The smuggling of huge amounts of contraband from China through our nation's largest port hurts American businesses and consumers. The charges and arrests here demonstrate our commitment to enforce our customs laws and keep the American public safe.'
According to an announcement Monday, eight suspects have been arrested, with seven taken into custody on Friday and one taken in on Saturday.
Weijun Zheng, 57, 'the lone fugitive' in the case, according to the release, remains at large and is believed to be in China, where the ring's criminal partners are believed to also reside. Prosecutors allege Zheng controls several logistics companies operating in the Los Angeles area.
The indictment said Zheng, 32-year-old Hexi Wang, 42-year-old Jin 'Mark' Liu and others maintained and operated warehouses to store, conceal and sell large amounts of contraband goods that were illegally imported into the United States from China. Another defendant, 31-year-old Dong 'Liam' Lin, controlled and operated one of the warehouses where contraband was unloaded, alongside Zheng.
Wang and Liu are the respective manager and owner of K&P International Logistics LLC, a company that hires commercial truckers to transport shipping containers from the Port of Los Angeles. Liu allegedly managed the finances of one of the contraband-stored warehouses and issued payments to truck drivers who transported smuggled goods.
Five more defendants were involved in the bust, all playing different roles in the scheme.
Marck Anthony Gomez, 49, owns and operates Fannum Trucks LLC, a trucking company that is accused of coordinating the movement of contraband-filled shipping containers from the Port of Los Angeles. Andy Estuardo Castillo Perez, 32, a driver for another trucking company, M4 Transportation Inc., transported shipping containers out of the twin ports.
Jesse James Rosales and Daniel Acosta Hoffman, both 41, coordinated truckers from the ports to warehouses. Another conspirator, 33-year-old Galvin Biao Liufu, directed and managed truck drivers to bring the contraband into the warehouses.
The truck drivers involved earned about $10,000 for each illegal shipment, according to prosecutors. These drivers typically earn $200 to $300 each time they move a shipping container.
'Homeland Security Investigations (HSI) Los Angeles and its partners are committed to enforcing customs laws and practices, facilitating legitimate trade and protecting the integrity of the nation's supply chain,' said HSI Los Angeles special agent in charge Eddy Wang, in a statement. 'The $1.3 billion dollars' worth of contraband seized during the investigation into this type of scheme illuminates how complex smuggling schemes try to exploit our legitimate trade practices and the American consumer.'
If convicted of all charges, the nine defendants would face a statutory maximum sentence of five years in federal prison for each conspiracy count, up to 10 years in federal prison for each count of breaking customs seals and up to 20 years in prison for each smuggling count.
The seven arrested last week were arraigned Friday, where each pleaded not guilty to the charges against them. A trial date was scheduled for March 18. The eighth defendant, who was arrested on unrelated state charges, is expected to be arraigned in federal court in the coming days.