LA Ports smuggling bust: Feds arrest 8 suspected of smuggling $200M in Chinese goods

Federal authorities have arrested eight individuals in connection with a large-scale smuggling operation that allegedly brought counterfeit and illegal goods from China into the United States through the Ports of Los Angeles and Long Beach. 

The operation, involving logistics companies, warehouse owners, and corrupt truck drivers, is believed to have smuggled at least $200 million worth of goods. An additional defendant, believed to be the lead orchestrator, remains at large and is thought to be in China. The defendants face multiple charges, including conspiracy, smuggling, and breaking customs seals.

9 charged in 15-count indictment

What We Know: Federal law enforcement has charged nine defendants in a 15-count indictment with conspiracy, smuggling, and breaking customs seals. The defendants allegedly collaborated with partners in China to manipulate shipping containers flagged for inspection, using logistics companies to facilitate the smuggling of counterfeit goods into the U.S. Investigators have seized over $130 million in contraband, and the organization is believed to have smuggled at least $200 million worth of goods through this scheme. The Ports of Los Angeles and Long Beach, the busiest container ports in the Western Hemisphere, were the focal points of the operation.

How the crime ring operated

According to Acting United States Attorney Joseph T. McNally, the scheme involved logistics companies, warehouse owners, and corrupt truck drivers working together to defy U.S. customs laws. The defendants and their partners in China filled shipping containers with contraband, including counterfeit goods and illegal chemicals. They circumvented the security system by learning the unique serial numbers of security seals and creating duplicate fake seals. These counterfeit seals were sent from China to the U.S. When shipments arrived at the port, instead of going to secondary inspection sites, corrupt truck drivers took the containers to offsite warehouses. There, the seals were cut, contraband removed, and new counterfeit seals applied before presenting the containers to Customs and Border Protection (CBP) for inspection. Truck drivers were paid significantly above normal rates to transport the containers illegally.

Timeline: The indictment details a conspiracy that operated from at least August 2023 to June 2024. The scheme involved filling shipping containers in China with contraband, counterfeit goods, and illegal chemicals. These containers were sealed with unique security seals, whose numbers the conspirators obtained in advance to create duplicate fake seals. Upon arrival in the U.S., the containers were diverted to offsite warehouses instead of secondary inspection sites, where the contraband was removed, and new counterfeit seals were applied before presenting the containers for Customs and Border Protection (CBP) inspection. Seven defendants were arrested on Friday, with an eighth taken into custody on Saturday. The arraignment for the seven arrested took place on Friday, where they pleaded not guilty, and a trial date was set for March 18. The eighth defendant is expected to be arraigned soon.

The Backstory: The smuggling operation involved executives from logistics companies, warehouse owners, and corrupt truck drivers who coordinated the shipment of contraband from China to the U.S. through the Port of Los Angeles. The defendants allegedly circumvented customs inspections by breaking security seals on containers, removing contraband, and replacing the seals with counterfeit ones to evade detection.

What They're Saying: Acting United States Attorney Joseph T. McNally emphasized the importance of secure seaports and borders for national security, stating that the smuggling operation harms American businesses and consumers. HSI Los Angeles Special Agent in Charge Eddy Wang highlighted the complexity of the smuggling schemes and their impact on legitimate trade practices.

Millions in dangerous materials seized

By the Numbers: The defendants face significant prison sentences if convicted, with up to five years for each conspiracy count, 10 years for each count of breaking customs seals, and 20 years for each smuggling count.

  • $130 million: The value of counterfeit and dangerous materials seized in relation to this scheme.
  • $200 million: The estimated value of smuggled goods attributed to this scheme.
  • $1.3 billion: The value of smuggled goods involved in this and other similar schemes under investigation.

What's Next: The case is being prosecuted by Assistant United States Attorneys Colin S. Scott and Amanda B. Elbogen. Eight of the nine defendants have been arrested, with the lead defendant still a fugitive. The investigation is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation, which aims to dismantle high-level criminal organizations threatening the United States. Authorities are also working to dismantle similar smuggling operations, and further developments are expected as the trial date approaches.

The Source: Information in this article comes from the Department of Justice.

Los AngelesCrime and Public SafetyInstastories