Prosecutors alleged that the organization, which operated through the Ports of Los Angeles and Long Beach between August 2023 and June 2024, smuggled an estimated $200 million worth of counterfeit and other illegal goods into the United States.
The scheme was discovered during a routine examination of a container by a team of Customs and Border Protection (CBP) agriculture specialists in 2023, and soon an investigation was launched.
In June 2024, investigators searched a warehouse allegedly used by the group and found $20 million worth of counterfeit items, including shoes, perfume, luxury handbags, apparel, and watches.
Since then, investigators have seized more than $130 million in contraband from various locations allegedly controlled by the group.
Seven defendants—including logistics executives and warehouse owners—were arrested Friday and an eighth was taken into custody Saturday evening. However, the alleged ringleader, 57-year-old Weijun Zheng, a.k.a. “Sonic,” remains on the loose.
All seven pleaded not guilty during their arraignment. The eighth defendant, who was arrested on unrelated state charges, has yet to be arraigned.
According to the 15-count indictment, the nine defendants are accused of transporting containers flagged by CBP for inspection to locations they controlled, including warehouses in the City of Industry in Los Angeles County.
At these locations, the group and their co-conspirators broke the security seals on the shipping containers and removed the contraband from inside, prosecutors said. Next, the containers would be stuffed with filler cargo and fitted with counterfeit security seals, before being shipped back to their original location in the harbor.
According to the indictment, the defendants hired commercial truck drivers through logistics companies they controlled to transport the containers from and back to the harbor, paying fees that were substantially higher than normal trucking wages.
“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.”
According to the U.S. Attorney’s Office, more than $1.3 billion worth of counterfeit goods have been seized in connection with this and similar “seal-swapping” schemes.
If convicted, the defendants would face a 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.
