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Intellectual Property Rights and Commercial Fraud


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NJ member of $300 million counterfeit conspiracy sentenced to federal prison

NEWARK, N.J. – A member of a massive, international conspiracy responsible for importing counterfeit goods from China worth a retail value of $300 million was sentenced Friday to more than three years in federal prison. The sentence follows an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the FBI.

Ning Guo, 40, a Chinese national, previously pleaded guilty before U.S. District Judge Esther Salas to one count of conspiracy to traffic in counterfeit goods and one count of money laundering conspiracy following his indictment by U.S. Attorney Paul J. Fishman.

According to court documents and statements, from August 2008 through February 2012 the defendants ran an international counterfeit goods smuggling and distribution conspiracy that 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 $300 million.

Two other conspirators have already been sentenced, and two await sentencing. Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and await sentencing.

Jian Zhi Mo, 45, of Flushing, N.Y. and Yuan Feng Lai, 28, of New York City, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and were each sentenced to 14 months of home confinement.

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 in Elizabeth, N.J. This corporation was actually a front company set up 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.

Certain conspirators controlled the importation of the counterfeit goods into the United States. Some conspirators managed the distribution of counterfeit goods once they arrived in the United States. Others paid individuals they believed controlled an importation company with connections at the port. In fact, these individuals were undercover law enforcement agents.

Some conspirators acted as wholesalers for the counterfeit goods, 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, moving this money through banks in the United States, China and elsewhere, to disguise the sources of the funds.

Law enforcement introduced several undercover special agents to the conspirators. These undercover 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 agents more than $900,000 for these "services."

Undercover 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.

Guo’s primary role was to transport and store imported counterfeit merchandise for the conspirators after it arrived at the port. He was also involved in the actual importation of the goods from China. Guo communicated with the undercover agents in numerous recorded calls and meetings about importing counterfeit goods from China and clearing the goods through customs. Guo was also involved in an international money laundering scheme through which he and others laundered the proceeds of the counterfeit goods smuggling scheme.

After serving his prison term, Guo faces removal from the United States by ICE.

Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and Nicholas Grippo of the U.S. Attorney’s Office in Trenton, prosecuted the case.

The HSI-led Intellectual Property Rights Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety and the U.S. economy.

For more information on the IPR Center please visit www.IPRCenter.gov.

HSI encourages the public to report intellectual property rights violations and related information by calling at 1-866-DHS-2ICE or by visiting www.ICE.gov/tips. For more information, visit www.ice.gov.


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Last Reviewed/Updated: 09/23/2014