NEWARK, N.J. — Three individuals were arrested Tuesday in the Los Angeles area for shipping millions of untaxed contraband cigarettes from Port Newark, N.J., to California. The arrests are a result of a federal investigation which included U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigation (HSI) among the investigating agencies.
Yazhou Wu, 28, of Diamond Bar, Calif.; Jia Yongming, 44, of Monterey Park, Calif., and Johnny Chan Koon Ha, 35, of Corona, Calif., were charged by complaint with conspiring to ship and distribute more than 4,600 cases of cigarettes, which bore no evidence of the payment of applicable state taxes.
A fourth man charged in the complaint, Ricky Le, 51, of Diamond Bar, is currently out of the country.
According to court documents, most states, including California, require a stamp to be placed on a pack of cigarettes indicating the appropriate state tax has been paid. From May 2009 through May 2011, California imposed a $0.87 tax on each pack of cigarettes. The complaint alleges that the cigarettes were shipped in containers from China to Port Newark, N.J., and then shipped by truck to the defendants in California, where they were delivered by officers working under cover. The officers were paid approximately $225,000 as commissions for delivering five loads of cigarettes. California lost more than $2 million in taxes as a result of this conspiracy.
If convicted, the defendants face a maximum potential penalty of five years in prison and $250,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.