NEWARK, N.J. — Five members of a massive, international counterfeit goods conspiracy pleaded guilty to their roles in the scheme in August. The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the FBI, U.S. Customs and Border Protection (CBP), and the Department of Justice's Organized Crime and Gangs Section's Office of Enforcement Operation and Office of International Affairs.
Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn, N.Y., and Ning Guo, 40, of China, pleaded guilty Friday before U.S. District Judge Esther Salas in Newark federal court to conspiracy to traffic in counterfeit goods. Guo also pleaded guilty to one count of money laundering conspiracy.
Jian Zhi Mo, 45, of Flushing, N.Y., and Yuan Feng Lai, 28, of New York City, pleaded guilty Aug. 12 to one count of conspiracy to traffic in counterfeit goods.
According to court documents, from August 2008 through February 2012, the defendants ran an international counterfeit goods smuggling and distribution conspiracy. The defendants and others imported more than 35 containers of counterfeit goods – primarily cigarettes, handbags and sneakers – into the United States from China. These goods, if legitimate, would have had a retail value of more than $47 million.
The conspirators sought help in importing counterfeit goods into the United States and used a corporation to import the goods through Port Newark-Elizabeth Marine Terminal. This corporation was actually a front company established by law enforcement to act as an importer. The conspirators imported the counterfeit goods using fraudulent customs paperwork, which, among other things, falsely declared the goods within the containers.
The conspirators had different roles. Some controlled the importation of counterfeit goods into the United States, while others managed the distribution of counterfeit goods once they arrived in the country. Additional conspirators paid individuals they believed controlled an importation company with connections at the port. In fact, these individuals were undercover law enforcement special agents.
Some conspirators acted as wholesalers, supplying retailers who sold counterfeit goods to customers in the United States. A number of conspirators, including Guo, also engaged in a money laundering conspiracy to disguise and conceal the source of what they believed to be the profits of certain unlawful activity. The money was moved through banks in the United States, China and elsewhere to disguise the sources of the laundered funds.
Law enforcement introduced several undercover special agents to the conspirators. These undercover special agents purported to have connections at the port, which allowed them to obtain containers that were on hold, get them released and pass them through to the conspirators. The conspirators paid the undercover special agents more than $900,000 for these "services."
Undercover special agents recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.
Each defendant faces up to 10 years in prison and a $2 million fine on the conspiracy to traffic in counterfeit goods charge. Guo also pleaded guilty to money laundering which is punishable by up to 20 years in prison and a fine of $500,000 or twice the gain or loss caused be the offense.
All five defendants are scheduled to be sentenced Nov. 25.