Feds Unravel Massive Smuggling Scheme; 3 IE Residents Charged

SOUTHERN CALIFORNIA — Three Inland Empire residents are among those snared in a long-running federal investigation into an alleged smuggling operation that saw hundreds of millions of dollars worth of counterfeit goods arrive from China into Southern California, the U.S. Department of Justice announced Monday morning.

Logistic companies' executives, warehouse owners and truck drivers were among those arrested and charged in an indictment alleging a conspiracy to smuggle at least $200 million worth of counterfeit and other illegal goods via the Ports of Los Angeles and Long Beach, the DOJ said.

The 15-count indictment, returned last month and unsealed Friday, charges nine defendants with conspiracy, smuggling and breaking customs seals. The alleged crimes occurred from at least August 2023 to June 2024, the DOJ reported.

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 U.S. District Court, where each pleaded not guilty to the charges against them. A trial date was scheduled for March 18. The eighth defendant, arrested on unrelated state charges, is expected to be arraigned in federal court in the coming days.

The DOJ named the nine defendants and their alleged roles in the scheme:

• 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, 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 U.S. 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 DOJ narrative, the defendants smuggled contraband from China into the U.S. by taking shipping containers flagged for off-site secondary inspection and first unloading the illegal goods, then stuffing the targeted containers with filler cargo to deceive customs officials and evade law enforcement.

Zheng, Wang, Liu and others maintained and operated warehouses to store, conceal and sell large amounts of contraband. The illegal goods allegedly included items such as shoes, perfume, luxury handbags, apparel and watches.

When the contraband containers were selected by U.S. Customs and Border Protection 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 owned or managed by Zheng, Wang and others.

The alleged co-conspirators broke the security seals on the shipping containers and removed the contraband from inside, according to prosecutors. 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 U.S. Customs and Border Protection-authorized locations for the remaining cargo to be presented to customs officials for inspection, prosecutors allege.

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, according to the indictment.

To date, law enforcement has seized more than $1.3 billion worth of counterfeit goods associated with this and similar "seal-swapping" schemes, the DOJ reported.

"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," said Homeland Security Investigations' Los Angeles Special Agent in Charge Eddy Wang.

The case initially unraveled in 2023 after a team of U.S. Customs and Border Protection agents who specialized in agriculture specialists and were assigned to the Los Angeles/Long Beach seaport conducted a routine examination of a container and made the first 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," Davies said.