Source: Office of United States Attorneys
LOS ANGELES – Federal law enforcement has arrested eight defendants charged in an indictment alleging a conspiracy among logistic companies’ executives, warehouse owners and truck drivers to smuggle hundreds of millions of dollars’ worth of counterfeit and other illegal goods from China into the United States via the Ports of Los Angeles and Long Beach, the Justice Department announced today.
The 15-count indictment, returned last month and unsealed Friday, charges nine defendants with conspiracy, smuggling and breaking customs seals. The defendants allegedly took containers flagged for off-site secondary inspection, unloaded the contraband, then stuffed the targeted containers with filler cargo to deceive customs officials and evade law enforcement.
During the investigation into this group, investigators seized more than $130 million in contraband, and the organization is believed to be responsible for smuggling at least $200 million worth of goods. According to the indictment, a search of one warehouse used by the group led to the seizure in June 2024 of $20 million worth of counterfeit items including shoes, perfume, luxury handbags, apparel and watches.
Seven defendants were arrested Friday, an eighth was taken into custody Saturday evening, and one defendant is a fugitive. The seven arrested last week were arraigned Friday in United States District Court, where each pleaded not guilty to the charges against them. A trial date was scheduled for March 18. The eighth defendant, who was arrested on unrelated state charges, is expected to be arraigned in federal court in the coming days.
“Secure seaports and borders are critical to our national security,” said Acting United States Attorney Joseph T. McNally. “The smuggling of huge amounts of contraband from China through our nation’s largest port hurts American businesses and consumers. The charges and arrests here demonstrate our commitment to enforce our customs laws and keep the American public safe.”
“Homeland Security Investigations (HSI) Los Angeles and its partners are committed to enforcing customs laws and practices, facilitating legitimate trade, and protecting the integrity of the nation’s supply chain,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “The $1.3 billion dollars’ worth of contraband seized during the investigation into this type of scheme illuminates how complex smuggling schemes try to exploit our legitimate trade practices and the American consumer.”
The 15-count indictment details a conspiracy to coordinate the shipment of large quantities of contraband from China to the United States through the Port of Los Angeles from at least August 2023 to June 2024. The defendants charged are:
- Weijun Zheng, 57, a.k.a. “Sonic,” of Diamond Bar, the lone fugitive in the case, who controls several logistics companies operating in the Los Angeles area;
- Hexi Wang, 32, of El Monte, who manages K&P International Logistics LLC, a City of Industry-based company that hires commercial truckers to transport shipping containers from the Port of Los Angeles;
- Jin “Mark” Liu, 42, of Irvine, the owner of K&P International Logistics LLC and who managed the finances of one of the warehouses where contraband was unloaded and issued payments to truck drivers who transported smuggled goods;
- Dong “Liam” Lin, 31, of Hacienda Heights, who – along with Zheng – controlled and operated one of the contraband warehouses;
- Marck Anthony Gomez, 49, of West Covina, the owner and operator of Fannum Trucks LLC, a West Covina-based company that coordinated the movement of shipping containers from the Port of Los Angeles, including large shipments of contraband smuggled into the United States from China;
- Andy Estuardo Castillo Perez, 32, of Apple Valley, a driver for M4 Transportation Inc., a Carson-based company that transports shipping containers from the Port of Los Angeles;
- Jesse James Rosales, 41, of Apple Valley, who coordinated truckers from the ports to warehouses;
- Daniel Acosta Hoffman, 41, of Hacienda Heights, worked with Rosales to bring cargo containers from the Port of Los Angeles to warehouses; and
- Galvin Biao Liufu, 33, of Ontario, directed and managed truck drivers to bring the contraband into the warehouses.
According to the indictment, Zheng, Wang, Liu and others maintained and operated warehouses to store, conceal and sell large amounts of contraband goods that were illegally imported into the United States from China. When the contraband containers were selected by U.S. Customs and Border Protection (CBP) for inspection, the defendants hired commercial truck drivers to transport the containers from the Port of Los Angeles to locations that the conspirators controlled, including warehouses in the City of Industry that were controlled or managed by Zheng, Wang and others.
At these locations, co-conspirators broke the security seals on the shipping containers and removed the contraband from inside. Then, they affixed counterfeit security seals onto the containers to conceal that cargo had been removed from them. Zheng, Wang and others then directed co-conspirators to transport the containers – after they had been emptied of much of their original cargo and re-secured with counterfeit seals – to CBP-authorized locations for the remaining cargo to be presented to customs officials for inspection.
Zheng, Wang, Liu and others paid fees to co-conspirators, including Gomez and Castillo Perez, that were substantially above normal trucking fees to transport the contraband shipping containers.
To date, law enforcement has seized more than $1.3 billion worth of counterfeit goods associated with this and similar seal-swapping schemes.
“It was a team of CBP agriculture specialists assigned to the Los Angeles/Long Beach seaport who in 2023, during a routine examination of a container made the initial discovery,” said Cheryl Davies, U.S. Customs and Border Protection, Director of Field Operations in Los Angeles. “This case attests to their unwavering vigilance, upmost professionalism, and keen focus in protecting the integrity of lawful trade, a key component of our critical national security mission.”
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, the defendants would face a statutory maximum sentence of five years in federal prison for each conspiracy count, up to 10 years in federal prison for each count of breaking customs seals, and up to 20 years in prison for each smuggling count.
Homeland Security Investigations, U.S. Customs and Border Protection, and Coast Guard Investigative Services are investigating this matter.
This effort is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Assistant United States Attorneys Colin S. Scott and Amanda B. Elbogen of the Terrorism and Export Crimes Section are prosecuting this matter.
MIL Security OSI –