5 Members Of Counterfeit Goods Operation Plead Guilty

NEWARK – Five members of a massive, international conspiracy that brought counterfeit goods in through Port Newark-Elizabeth Marine Terminal in Elizabeth 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 one count each of 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 on Aug. 12, to one count each 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. 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.

Ning 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.

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, N.J., 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.

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.

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