8 Arrested, 2 Sought in $100-Million Smuggling Ring

A smuggling ring that flooded the American market with as much as $100 million worth of Chinese-made clothing, luggage and medicine has been broken up with the indictment of 10 people, federal authorities in Los Angeles said Thursday.

Operating from 1993 to 1997, the ring allegedly avoided paying millions of dollars in duties, which ran as high as 30% on some items, and circumvented import quotas on some Chinese-made goods.

Eight suspects are in custody and two are being sought, the U.S. attorney’s office and Customs Service said.

Documents seized during a court-approved search showed that $70 million to $100 million worth of import items were smuggled into the country while the ring was operating, said Mark Gwaltney, assistant chief of the Customs Service’s Los Angeles regional office.

Concealed in as many as 1,000 truck-sized shipping containers, the merchandise wound up in department stores and retail outlets from Southern California to New York City, he said.

“This was a very major operation,” he added.

The pivotal figure in the scheme was identified by federal authorities as Shen Yu Juang, 51, of Downey, operator of a customs-bonded container freight station and owner of two trucking firms.

Investigators said the defendants arranged for the clothing and medicines to be shipped inside large containers into the ports of Los Angeles and Long Beach.

Once the goods arrived, the investigators said, Juang would file a transfer permit with the Customs Service, allowing him to move the containers to his freight yard. But instead of being delivered there, the containers allegedly would be sent to other importers, including some of the accused.

Juang filed entry documents that falsely described the imported goods as plastic bags or wooden furniture, items that have no quota restrictions and very low duty rates, according to U.S. attorney’s office spokesman Thom Mrozek.

In exchange for his help, Juang allegedly received millions of dollars in payoffs from the importers. Juang admitted his role in the smuggling operation during an interview after his arrest, according to an affidavit by Customs Agent Richard K. Mann.

In addition to Juang, those arrested were Johnny Hung Wang, 33, of Huntington Beach; Janette Wang, 29, of Huntington Beach; Won Chi Lu, also known as Frank Lu, 26, of San Gabriel; Thomas Man Chung Tao, 54, of Hacienda Heights; Ken Lee Lam, 55, of Brooklyn, N.Y.; Alan Kon Chon Siu, 40, of San Francisco; and Martin Tai On Ng, also known as Martin Wu, 48, of Monterey Park. The two fugitives being sought are Chien Chen, also known as Tommy Chen, 32, of Hacienda Heights; and Cheng Hong Yen, also known as George Yen, 53, of Hong Kong.

Tao was indicted last week by a federal grand jury in Los Angeles, Juang was charged in January, and the others were indicted in April. All 10 were charged with smuggling and conspiracy.

The indictments and arrests followed a several-month investigation by inspectors from the Customs Service and the Food and Drug Administration, some of whom worked undercover on the docks.