LOS ANGELES – A Los Angeles man has pleaded guilty to illegally engaging in the business of importing tobacco products.
Zhi Xiong Chen, 56, of Chinatown, pleaded guilty yesterday to the felony offense and admitted that for nearly five years, despite not holding a permit to import tobacco products, he used several addresses to receive 15,128 cartons of Chinese-brand cigarettes. During this time, U.S. Customs and Border Protection officers also stopped approximately 9,824 cartons of Chinese-brand cigarettes at international mail facilities in California and New York.
As part of the scheme, Chen admitted that he attempted to evade paying more than $467,000 in federal and state excise taxes on the cigarettes that he illegally imported.
“From early 2011 until mid-2016, this defendant illegally imported thousands of cartons of Chinese-made cigarettes without the necessary permits and without paying excise taxes,” said United States Attorney Eileen M. Decker. “The defendant's crime not only cheated taxpayers, but also caused unregulated, potentially dangerous products to be sold to an unsuspecting public.”
“While Zhi Xiong Chen was illegally importing tens of thousands of cartons of cigarettes into the United States, he was also evading hundreds of thousands of dollars in taxes due on those cigarettes,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department's Tax Division. “Importers who obtain the required permits and pay their fair share of taxes deserve to compete on a level playing field. Those who try to cut corners and skirt these legal obligations should know that they will be investigated and prosecuted.”
Chen pleaded guilty before United States District Judge George H. Wu, who is scheduled to sentence the defendant on April 17, at which time he will face a statutory maximum penalty of five years in federal prison.
This case is being investigated by the Alcohol and Tobacco Tax and Trade Bureau, the U.S. Food and Drug Administration's Criminal Investigations, and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Tax Division and Trial Attorney Christopher S. Strauss of the Justice Department's Tax Division.
USAO – California, Central Updated January 31, 2017
Central District of California DOJ / 17-023 / January 31, 2017