The description of the crime
Operations Smoking Dragon (in Los Angeles) and Royal Charm (in New Jersey) led to the indictment of 87 individuals from China, Taiwan, Canada, and the U.S. The investigations uncovered and dismantled an international smuggling ring that could have threatened the country’s national security. The smugglers conspired to smuggle massive quantities of counterfeit money, weapons, drugs, cigarettes and other contraband into the United States.
Charges against the subjects included smuggling real and phony drugs and other contraband into the U.S. along with counterfeit $100 bills—believed to have been produced in North Korea—that were so nearly perfect and so much more sophisticated than typical counterfeit currency they were dubbed “Supernotes.” The conspirators also offered to smuggle a variety of Chinese military-grade weapons.
United States of AmericaBetween Smoking Dragon and Royal Charm, some $4.5 million in counterfeit currency was seized, along with more than $40 million worth of counterfeit cigarettes, drugs, and other real and phony items. The smugglers were also forced to forfeit a total of $24 million in cash, along with real estate, cars, and jewelry. Some were also ordered to pay restitution to the legitimate cigarette producers.
This was a long term investigation which involved many law enforcement agencies on both coasts of the United States. The investigation and prosecution revealed a massive international smuggling operation.
Investigative measures and methods
The eight-year investigation began when FBI undercover agents, posing as underworld criminals, helped make sure that shipping containers full of counterfeit cigarettes made it past U.S. Customs officers undetected. Over time, as undercover agents won the smugglers’ trust, they were asked to facilitate other illegal shipments such as narcotics and millions of dollars in Supernotes. Later, the smugglers offered a variety of Chinese military-grade weapons, including the QW-2 surface-to-air missiles. During the course of both Operations, the defendants also smuggled billions of counterfeit cigarettes worth more than $40 million, with an additional $9 million in potential lost taxes.
Some of the drugs—including methamphetamine and fake Viagra—were hidden in large cardboard boxes with false bottoms that contained toys. The Supernotes were placed between the pages of books or lined in large bolts of rolled-up fabric. All of the items were smuggled into the U.S. in 40-foot shipping containers.
Operations Smoking Dragon and Royal Charm were investigations run by the Federal Bureau of Investigation, which received substantial assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Immigration and Customs Enforcement, the United States Secret Service and many local law enforcement agencies.
Most of the subjects pleaded guilty and were sentenced to lengthy terms. Several went to trial, where mounds of evidence were presented to the Court. Yi Qing Chen, for example, went to trial October 2010 and was convicted by a federal jury five felony counts—conspiracy to distribute methamphetamine and cocaine, distribution of cocaine, trafficking in counterfeit cigarettes (approximately 800,000 cases of cigarettes), trafficking in contraband cigarettes, and conspiracy to import missile systems designed to destroy aircraft.
The United States also pursued criminal forfeiture as part of this prosecution. Between Smoking Dragon and Royal Charm, some $4.5 million in counterfeit currency was seized, along with more than $40 million worth of counterfeit cigarettes, drugs, and other real and phony items. The smugglers were also forced to forfeit a total of $24 million in cash, along with real estate, cars, and jewelry. Some were also ordered to pay restitution to the legitimate cigarette producers.
When he was in Court in May 2011, Chen was sentenced to 25 years in federal prison. He was also ordered pay $520,000 to Philip Morris for the counterfeit cigarettes he smuggled into the United States.
conspiracy to distribute methamphetamine and cocaine
conspiracy to distribute methamphetamine and cocaine
distribution of cocaine
trafficking in counterfeit cigarettes
trafficking in contraband cigarettes
conspiracy to import missile systems designed to destroy aircraft
Smoking Dragon and Royal Charm dismantled a massive international smuggling ring. The investigation and prosecution revealed that Asian OC groups (like all others around the world) are adept at finding and developing illicit money-making ventures and will stop at nearly nothing to make a profit. The crimes threatened financial and national security. More than $4.5 million in counterfeit US currency (“Supernotes”) were seized during one portion of the investigation. Chen’s conviction was the first in the US under a 2004 anti-terrorism statute that outlaws the importation of missile systems designed to destroy aircraft.
The undercover operations which occurred simultaneously on both U.S. coasts were integral to the success of this organized crime investigation and prosecution. In this instance, it was the only effective means to infiltrating the criminal conspiracy and identifying a broad array of culpable parties.