Financial Fraud: Six Chinese Charged With Conspiring To Traffic Contraband Cigarettes

Six Individuals Charged With Conspiring To Traffic More Than $30 Million Of Contraband Cigarettes

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), Matthew Modafferi, Special Agent in Charge, U.S. Postal Service, Office of Inspector General, Northeast Area Field Office (“USPS-OIG”), and Joseph Fucito, New York City Sheriff, announced today the unsealing of an Indictment in Manhattan federal court charging SHAO JUN GUO, JIAN JIANG FENG, YUE JUAN CHEN, ZHURONG GAO, SHUI YING LIN, and WO KIT CHENG with conspiring to traffic contraband cigarettes and trafficking contraband cigarettes. The defendants were arrested yesterday and will be presented before U.S. Magistrate Judge Robert W. Lehrburger today. The case is assigned to U.S. District Judge Jesse M. Furman. The defendants will be arraigned before Judge Furman on January 31, 2019, at 11:00 a.m.

As alleged in the Indictment, SHAO JUN GUO, JIAN JIANG FENG, YUE JUAN CHEN, ZHURONG GAO, SHUI YING LIN, and WO KIT CHENG conspired to traffic more than $30 million of contraband cigarettes to avoid approximately $30 million in taxes. The case is assigned to United States District Judge Jesse M. Furman.

U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants trafficked in massive quantities of contraband cigarettes, defrauding city, state, and federal governments of millions of dollars in tax revenue. That is lost tax revenue that would be used to fund research into cancer and other smoking-related illnesses, and to fund cessation and anti-smoking programs. These defendants’ alleged scheme to make millions, cheat taxing authorities, and deny funds for healthcare programs has gone up in smoke.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “These defendants thought they could get away with their scheme to distribute contraband cigarettes, avoiding regulations put in place to protect the public, businesses and the City from fraud. Their illegal profit went up in smoke.”

HSI Special Agent-in-Charge Angel M. Melendez said: “For the past six years these defendants smuggled untaxed cigarettes into the United States causing lost revenue to the U.S. economy to the tune of $30 million dollars in unpaid taxes. Whether it be drugs, counterfeit goods or untaxed cigarettes, smuggling items into the United States is a crime that we at HSI take very seriously as we work every day to secure our borders.”

USPS-OIG Special Agent-in-Charge Matthew Modafferi said: “In certain instances, the Special Agents of the U.S. Postal Service, Office of Inspector General will work with their law enforcement partners to stop those who use the U.S. Mail to facilitate their crimes. We would like to thank the U.S. Attorney’s Office, USPIS, HSI, and New York City Sheriff’s Department for their collaborative efforts in developing this investigation.”

Sheriff Joseph Fucito said: “The alleged criminal conduct of the defendants deprives all New Yorkers of significant tax revenues. These lost revenues impact public safety, education, health, housing, and social services. The New York City DOF Sheriff’s Department will continue to investigate and pursue criminal conduct to ensure these invaluable services are sustained.”

According to the allegations in the Indictment unsealed today in Manhattan federal court[1]: From June 2013 through January 2019, the defendants engaged in a scheme to smuggle and traffic $30 million of untaxed cigarettes in the United States to avoid at least $30 million in taxes.

SHAO JUN GUO, 42, of Brooklyn, New York, JIAN JIANG FENG of New York, New York, YUE JUAN CHEN, 41, of Bayside, New York, ZHURONG GAO, 66, of New York, New York, SHUI YING LIN, 43, of Brooklyn, New York, and WO KIT CHENG, 44, of Brooklyn, New York, have each been charged with one count of conspiracy to traffic contraband cigarettes, which carries a maximum prison term of five years; and one count of trafficking contraband cigarettes, which carries a maximum prison term of five years. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the USPIS, HSI, and the New York City Sheriff’s Department.

This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Ryan B. Finkel, Elizabeth Espinosa, and Andrew Chan are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.