Posted on January 29, 2025
Federal authorities have uncovered a sophisticated smuggling operation at the Ports of Los Angeles and Long Beach, leading to the arrest of eight defendants in connection with a scheme to import counterfeit goods from China.
The operation, which ran from August 2023 to June 2024, involved logistics company executives, warehouse owners, and truck drivers who allegedly circumvented customs inspections by breaking container seals and replacing contraband with filler cargo.
Investigators seized more than $130 million in contraband during the investigation, with the organization believed to be responsible for smuggling at least $200 million worth of goods. A June 2024 warehouse raid yielded $20 million in counterfeit items, including luxury handbags, watches, shoes, perfume, and apparel.
“Secure seaports and borders are critical to our national security,” said Acting United States Attorney Joseph T. McNally. “The smuggling of huge amounts of contraband from China through our nation’s largest port hurts American businesses and consumers.”
According to the Justice Department, law enforcement has seized $1.3 billion worth of counterfeit goods connected to this and similar seal-swapping schemes.
“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 HSI Los Angeles Special Agent in Charge Eddy Wang.
The neighboring ports of Los Angeles and Long Beach rank as the two busiest container ports in the nation, handling nearly 20 million TEUs combined in 2024.
The scheme was initially discovered in 2023 by CBP agriculture specialists during a routine container examination. According to the indictment, the defendants operated warehouses in the City of Industry where they would break security seals on containers flagged for inspection, remove contraband, and replace the seals with counterfeit versions before sending the containers to authorized inspection locations.
Eight defendants are in custody, while one remains a fugitive. The defendants face multiple charges, including conspiracy, smuggling, and breaking customs seals. If convicted, they could face up to 20 years in prison for smuggling counts, 10 years for breaking customs seals, and 5 years for each conspiracy count.
The case is being investigated by Homeland Security Investigations, U.S. Customs and Border Protection, and Coast Guard Investigative Services.
