$200 million smuggling ring stopped at Port Newark
U.S. law enforcement authorities on Wednesday arrested and charged 10 people with running a large counterfeit smuggling ring through the Port of New York and New Jersey.
Immigration and Customs Enforcement said the defendants had smuggled the equivalent of $200 million worth of high-end merchandise from China for retail sale in the area through the Elizabeth Marine Terminal in Port Newark, N.J.
Since June 2006 the smuggling ring imported more than 100 40-foot containers containing counterfeit Nike shoes, Burberry and Chanel handbags, Polo Ralph Lauren and Baby Phat brand clothing, and other name-brand items, according to the complaint unsealed in U.S. District Court in Manhattan.
The conspirators paid more than $500,000 in cash bribes to an undercover ICE agent who posed as a corrupt longshoreman union official at Port Newark who had the ability to clear imported cargo through U.S. Customs without detection or seizure.
The smugglers disguised the shipments by using fraudulent bills of lading. One shipping document, for example, listed the contents as “noodles” when it actually contained fake Nike sneakers, the complaint said.
Officials made clear that these items were being sold in retail stores, not on the street as cheap knockoffs. Once the fake goods cleared Customs they were typically transported to warehouses in the area for short-term storage before distribution to retail establishments.
The indicted individuals include Robin Huff, a licensed customs broker who assisted the ring by monitoring the status of incoming containers through the Automated Broker Interface, an electronic cargo database that CBP uses to communicate with brokers. The ring leaders are alleged to be Michael Chu, 70, of Manhattan and Grace Quezon, 38, who lives in Jersey City, N.J.
If convicted, the defendants could face a maximum of 35 years in jail and fines of $2.5 million or more.
Investigators executed four search warrants in the New York metropolitan area and seized two trucks used by KT Express to transport the counterfeit goods, ICE said. The owners of Brooklyn-based KT Express allegedly charged the smugglers a premium to transport from Port Newark to warehouses and retailers in the New York City area.
Smuggling of bogus and illegally produced goods costs legitimate producers in the United States between $200 billion and $250 billion per year, according to U.S. officials.
They acknowledge the case raises questions about the ability of terrorists to game the system to smuggle weapons or people into the country, but prosecutors said this case was purely for profit.