Smuggler in global ring gets 11 years
The U.S. called Chang Shan Liu a leader in the Newark operation. He said he had done the bidding of others.
Chang Shan Liu was either a leader in an international smuggling ring, or a minor player swept up in a sprawling federal investigation.
Either way, he helped FBI agents whom he thought were members of the New Jersey Mafia import about 100 million counterfeit cigarettes from China through Port Newark.
The investigation, which started with a 1999 meeting between Liu and the undercover agents, lasted six years as the agents followed a global trail of crime that eventually included drugs, counterfeit U.S. currency, and heavy-arms dealing.
At his sentencing yesterday in U.S. District Court in Camden, Liu said he merely had followed the instructions of the agents and his contact in China.
"I am not a mastermind or an organizer at all," Liu said. "I truly regret what I did. I was foolish enough to say yes to the undercover agents."
Liu's attorney, Martin Schmukler, argued that his client should be allowed probation and house arrest so he could care for his wife, May, who suffered a debilitating stroke in 2004.
Instead, Judge Jerome B. Simandle gave Liu, 69, more than 11 years in prison.
Prosecutors said Liu and his wife had served as brokers for two Chinese citizens who led a smuggling operation.
The ring had been importing fake Marlboro and Newport cigarettes made in China through Long Beach, Calif. In the late-1990s, after several seizures there, the ring was looking for a new port.
The undercover agents told the Lius that they had contacts at Port Newark who could get shipments through customs. From December 2001 to August 2005, the Lius arranged for 13 shipments - about 100 million cigarettes - to arrive at Port Newark.
Agents delivered the cigarettes to places and people specified by the Lius, prosecutors said. Because they were not taxed, the cigarettes were sold at prices as low as half the price of legal cigarettes.
Most were distributed in New York, New Jersey and Philadelphia, but others went as far as Chicago and Canada. Agents had the counterfeit cigarettes tested to make sure they were no more toxic than legal cigarettes before delivering them.
The investigation began to branch out. In Chicago, for instance, a cigarette distributor offered to pay the agents in ecstasy pills instead of cash. He then introduced them to a Canadian man who sold the agents 12,000 doses of ecstasy.
The agents also began importing cigarettes for another man, Khanh "Keith" Tang. They later asked him whether he had any connections for drugs, guns and counterfeit money.
Tang took the agents to meet Jyimin "Jimmy" Horng in Phuket, Thailand. Horng eventually arranged to ship to Newark $3.3 million in counterfeit currency known as "super notes" because of the high quality of the bills. Super notes often are made in North Korea.
Horng also sent 390 grams of crystal methamphetamine into the country and arranged a shipment of weapons. The agents selected the arms from a catalog they were provided. The $1 million shipment included rockets, silenced submachine guns, and antitank missiles, but the weapons were not sent before the arrests were made.
Nearly 90 defendants were indicted in federal courts in Camden and California in 2005. Fifty-seven were charged in New Jersey, and about 45 of them have been convicted, Assistant U.S. Attorney Hallie Mitchell said.
Chang Shan Liu pleaded guilty in December to one count of racketeering conspiracy. Charges against his wife have been dismissed, largely because fo her health.
"Mr. Liu was the one who had a foot in China and a foot in the U.S.," Simandle said. "That was unique among all these defendants."
Liu's alleged contact in China, Ching Ming Hsu, remains a fugitive. Horng, who pleaded guilty, is awaiting sentencing in Camden.
Eleven of the New Jersey defendants, including Chang Shan Liu, were arrested after they were invited to Atlantic City to attend a fictitious wedding between two of the undercover agents.
Agents sent limos to chauffeur the guests from their hotel to the wedding, supposedly to be held aboard a yacht. Instead, the limos drove to the FBI building in Northfield, where the suspects were arrested.
Schmukler said the staged wedding was not "the high-water mark in the administration of justice," and likened it to a perp walk for news cameras.
"This was not a publicity stunt," Mitchell responded. "It was a lure to bring in all these criminals from all over the country and the world."