Video: Huge counterfeit smuggling ring busted

updated 6/26/2007 9:38:44 PM ET 2007-06-27T01:38:44

Private brokers licensed by the government to clear commercial imports participated in a scheme to flood the U.S. market with fake Nike sneakers, Rolex watches and other Chinese-made counterfeit products, authorities said Tuesday.

The brokers were named in criminal complaints charging 29 people with conspiring to smuggle more than 950 shipments of high-quality knockoffs through New York City, Long Beach, Calif., Texas and other ports of entry. In New York, the items were hidden in warehouses in Brooklyn and Queens before being sold to tourists in Chinatown and other parts of Manhattan.

The goods — including fake Ray-Ban sunglasses, Coach handbags and North Face jackets — would have been worth about $700 million if authentic. Authorities say such schemes divert income from legitimate manufacturers while cheating the government out of tax revenue.

Federal agents picked up most of the suspects Tuesday, and they were to be arraigned in federal court in Brooklyn.

The arrests following a 19-month investigation “represent our intolerance for criminals who seek to circumvent the legal customs process to bring contraband onto our streets,” said Julie Myers, assistant secretary of Homeland Security for Immigration and Customs Enforcement.

Officials said it was one of the largest plots in recent history involving corrupt customs brokers. The government licenses the brokers to inspect paperwork provided by importers and to clear merchandise for delivery to wholesalers.

The brokers “were deeply involved and engaged in these activities,” said Kevin Delli-Colli, acting head of ICE’s New York office.

Shippers and warehouse owners also were charged.

Four defendants charged with money laundering face up to 20 years in prison if convicted. The rest face up to five years if convicted of conspiracy.

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