Thread: 9 indicted for smuggling millions of dollars in counterfeit

I.C.E. News Release

March 19, 2010

9 indicted for smuggling millions of dollars in counterfeit goods manufactured in Asia through the Port of Baltimore

6 other suspects arrested by British authorities in related case

BALTIMORE - Under cover operations performed by U.S. Immigration and Customs Enforcement (ICE) officers resulted in the indictment of 9 individuals, including 2 Malaysian citizens, 4 Chinese citizens and 3 naturalized citizens of the United States. These charges arose from a conspiracy to smuggle into the United States counterfeit shoes, handbags and wrist watches manufactured in Malaysia and China.

Charged in the indictment are: Wai Hong Yong, aka Raymond Yong, 43 and Eng Cheng Kee, 40, both of Malaysia; Hexing Yang, aka Marco Yang, 38, Chan Hong Xu, 40, Lidan Zhang, aka Mrs. Li, 39 and Kai T. Jaing, aka Kent, 25, all of the People's Republic of China; Josephine O. Zhou, 32, of Brooklyn, New York; Kin Yip Ng, aka James Lee, 43, of Whitestone, New York; and Yenn-Kun Hsieh, aka Jimmy Lee, 45, of Queens, New York.

According to the 72 count indictment, the defendants contacted individuals, who unbeknownst to them were ICE undercover agents, to import and clear shipments of counterfeit products into the United States without payment of the required federal taxes and customs duties. The defendants acted as manufacturers, brokers, middlemen and distributors of counterfeit Nike, Coach and Gucci shoes, Cartier wrist watches and Coach handbags, typically manufactured in Malaysia and China. These goods were shipped to the Port of Baltimore to be "cleared" through U.S. Customs for sale in the United States.

"Criminal organizations that smuggle and sell counterfeit goods in the United States endanger our economy and rob legitimate industries of their business," said ICE Assistant Secretary John Morton. "Yesterday's arrests are proof that ICE, along with our partners, is committed to identifying, infiltrating and disrupting these criminal enterprises."

The indictment alleges that at one point, on September 29, 2009, Yong sent a sample of counterfeit "Viagra" pills to the undercover agents hoping to facilitate future sales of the drug. Yong also is alleged to have wired money to the agents on October 27, and December 9 and 17, 2009 for three containers to be shipped to England. Yong allegedly met with ICE undercover agents in London, England on November 4, 2009 to discuss expanding the smuggling of counterfeit goods to England.

As a result of this scheme, the indictment alleges that the defendants illegally smuggled into the United States a total of 120,000 pairs of counterfeit Nike shoes, 500,000 counterfeit Coach handbags, 10,000 pairs of counterfeit Coach and Gucci shoes and 500 counterfeit Cartier wrist watches.

The indictment alleges that on 33 occasions from May 2008 to December 2009, defendants Yong, Yang, Kee, Zhou, Xu, Zhang and Ng directed the shipment of containers of counterfeit goods to the Port of Baltimore. The defendants allegedly directed that the goods be transferred to locations in New York and New Jersey, or had the goods picked up in Maryland. The indictment alleges that the co-conspirators, including Yong, Jiang, Xu, Ng and Zhou, paid a smuggling fee, either directly to undercover officers or through electronic transfer. The indictment charges that the co-conspirators often paid an additional amount of money, either in cash or electronically, which was to be "laundered" through the undercover agents. Yong directed that the "laundered" money be wired to accounts in Malaysia or to a company in Asia.

The indictment seeks forfeiture of: all counterfeit merchandise smuggled into the United States or its monetary value, including at least $1 million for each count of conviction for smuggling; any property used to traffic in counterfeit goods, including at least $1 million for each count of conviction for trafficking; and $122,943.50, the amount alleged to have been illegally laundered through the undercover business.

"Coach is extremely pleased with the announcement made today by Immigration & Customs Enforcement regarding their investigation into alleged major distributors of counterfeit goods. We are well aware of the serious economic, health and safety risk that counterfeit goods pose to the American public, and applaud the efforts of the Department of Justice, the Department of Homeland Security, and, specifically, the Immigration and Customs Enforcement agents who conducted this investigation. We are grateful to these men and women, and will continue to support the endeavors of these agencies, as they work hard to protect the health and safety of the public from criminal activities, such as counterfeiting," said Nancy Axilrod, Associate General Counsel, Coach, Inc.

"Nike is grateful for the diligence and hard work that the agents of Immigration & Customs Enforcement have demonstrated throughout this investigation. Their commitment to ending the flow of counterfeit goods across borders has been unwavering," said Lori Colbert, North America Brand Protection Manager for NIKE, Inc.

The defendants face a maximum sentence of five years in prison for the conspiracy; a maximum of 20 years in prison on each of the 33 counts of smuggling goods into the U.S.; a maximum of 10 years in prison on each of the 33 counts of trafficking in counterfeit goods; and a maximum of 20 years in prison on each of the five counts of money laundering. All of the defendants will be transferred to Maryland following their initial appearances in the jurisdictions in which they were arrested.

-- ICE --

U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the Department of Homeland Security.

ICE comprises four integrated divisions that form a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities. For more information, visit www.ICE.gov. To report suspicious activity, call 1-866-347-2423.

Last Modified: Friday, March 19, 2010
U.S. Department of Homeland Security

http://www.ice.gov/pi/nr/1003/100319baltimore.htm

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