Five Members of Massive Counterfeit Goods Conspiracy Plead Guilty
|U.S. Attorney’s Office August 16, 2013|
NEWARK, NJ—Five members of a massive, international counterfeit goods conspiracy have pleaded guilty to their roles in the scheme, U.S. Attorney Paul J. Fishman announced.
Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn; and Ning Guo, 40, of People’s Republic of China, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court to informations charging them each with one count of conspiracy to traffic in counterfeit goods. Guo also pleaded guilty to one count of money laundering conspiracy.
Jian Zhi Mo, 45, of Flushing, New York, and Yuan Feng Lai, 28, of New York City, pleaded guilty on August 12, 2013, before Judge Salas in Newark federal court to informations charging them each with one count of conspiracy to traffic in counterfeit goods.
According to documents filed in this case and statements made in court:
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 in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 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 in Elizabeth, New Jersey. 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 laundered 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.
Roles of the Individual Defendants
- Ning Guo’s primary role in both conspiracies 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.
- Jian Zhi Mo was introduced by Guo to an undercover agent in March 2011. Mo then began to meet regularly with undercover agents to provide false and fraudulent customs paperwork to the agents relating to shipments of counterfeit goods. Mo also received counterfeit goods from undercover agents and transported the goods to locations controlled by other conspirators. Mo also paid the undercover agents hundreds of thousands of dollars as their “fees” for clearing the containers of counterfeit goods through customs.
- Yi Jian Chen was introduced to an FBI undercover agent in August 2010 by a conspirator who said he wanted to import a container of counterfeit sneakers. A conspirator provided fraudulent customs paperwork to the agents and set up the delivery of a container of counterfeit goods to one of his customers. The buyer turned out to be defendant Chen. The agents engaged in several recorded conversations with Chen. At one of these meetings, Chen and Guo met with undercover agents in Linden, New Jersey, and Guo provided, on behalf of Chen, approximately $32,000 to ensure the counterfeit goods would be released from the port and delivered to a warehouse controlled by conspirators.
- Hui Huang was introduced to an FBI undercover agent in November 2011 by Chen. Huang subsequently had the agents clear two containers of counterfeit goods for Huang and a conspirator.
- Yuan Feng Lai provided undercover agents with cash and fraudulent customs paperwork to smuggle counterfeit goods into the United States. Lai also accepted money from the undercover agents, delivered it to money launderers, and acted as a warehouse manager for one of the warehouses run by Guo.
The conspiracy to traffic in counterfeit goods count to which the defendants pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a fine of $2 million. The money laundering count to which Guo pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $500,000 or twice the gain or loss caused be the offense. Sentencing for Mo and Lai is scheduled for November 25, 2013. Sentencing for Guo, Chen, and Huang is scheduled for November 25, 2013.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, for the investigation leading to this week’s guilty pleas.
The government is represented by 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.