08-22-05 -- Royal Charm -- Indictments - News Release

International Smuggling, Counterfeiting Enterprise Busted; Dozens of Arrests on New Jersey Indictments

NEWARK - Nearly four dozen leaders and associates of an international criminal enterprise have been charged in six indictments - forty-three of them were arrested over the weekend in New Jersey and other states - with running a smuggling ring that brought large quantities of counterfeit cigarettes, millions of dollars in high-quality counterfeit U.S. currency and drugs into the United States through Port Newark and other domestic ports, U.S. Attorney Christopher J. Christie announced.

The indictments, including three racketeering indictments, charge 57 individuals. Of those, several were arrested beginning on Friday as they arrived in Atlantic City to attend a wedding, which was actually a ruse established by the Federal Bureau of Investigation to draw the defendants to the United States for arrest.

The rest of the defendants were arrested in New Jersey, Los Angeles, Chicago, Baltimore, New York, Philadelphia, Los Vegas and Cincinnati.

The "wedding" was scheduled for Sunday off the coast of Atlantic City and Cape May aboard the luxury yacht "Royal Charm," which is also the operational name for the investigation. The yacht, in fact, did not exist. The targets had responded to a wedding invitation that purported to announce the marriage of a co-conspirator who was actually an undercover federal agent.

Also today, Debra Yang, the U.S. Attorney for the Central District of California (Los Angeles), announced indictments against 32 individuals in a parallel investigation involving the importation of counterfeit cigarettes through the ports of Los Angles and Long Beach. Approximately 20 were arrested in the California investigation. Christie and Yang were in Washington with U.S. Assistant Attorney General John C. Richter for the initial announcement of the investigations earlier today.

"For those of the conspirators who thought they'd be celebrating a wedding in Atlantic City this past weekend, the party ended as soon as they arrived in New Jersey," said Christie. "This organization had its hands in a slew of global criminal enterprises, but it has been stopped cold by this undercover operation, which is a tribute to the abilities of all the law enforcement who worked the case."

Those arrested in New Jersey were scheduled to make initial appearances today before a U.S. Magistrate Judge in U.S. District Court in Camden, where the indictments were returned under seal over the course of the last three months.

The nearly six-year investigation focused initially on the brokering and smuggling of counterfeit cigarettes into the U.S. - mainly aboard shipping containers entering Port Newark - from a small group of individuals with purported ties and ownership interests in manufacturing plants.

As the investigation progressed, the smuggling enterprise brokered the sale of millions of dollars in high-quality counterfeit United States currency - so-called "Supernotes." The indictments allege that in October 2004, a shipping container loaded with approximately $338,000 in Supernotes arrived in Newark, followed by a shipment of more than $3 million in Supernotes in December 2004. A third shipment of nearly $2 million in Supernotes recently departed from a foreign country and is destined to arrive in the United States in September.

The indictments further allege that leaders of the conspiracy, in conversations with undercover federal agents who infiltrated the ring, entered into a $1 million deal to provide various weapons, including 100 silenced pistols, 100 fully automatic submachine guns, 50 rocket-propelled grenade launchers, 75 single use anti-tank missiles, and 1,200 fully automatic AK-47 assault rifles. The agents wire transferred a $50,000 deposit for the weapons to an overseas bank, but the weapons have not entered the United States. The defendants were charged with conspiracy to engage in arms trafficking.

To date, Operation Royal Charm has resulted in the seizure of more than $3.3 million in Supernotes, the importation of 200 million counterfeit cigarettes, 45,000 ecstasy pills and 390 grams of methamphetamine, and approximately $1 million in cash.

Some of the charges against the defendants include: racketeering conspiracy (maximum prison sentence of 20 years); conspiracy to deal in counterfeit obligations of the United States (maximum of 20 years in prison); money laundering (maximum of 20 years in prison); conspiracy to import narcotics into the United States (maximum life in prison); importation of crystal methamphetamine and ecstacy (maximum life in prison); trafficking in goods bearing counterfeit marks and trafficking in counterfeit cigarettes (maximum of 10 years and five years, respectively, in prison); smuggling (maximum of five years in prison).

The three Racketeering Indictments name forty four individuals. The leading conspirators, according to the Indictments are: Chen Ming Hsu, 43, of the People's Republic of China; Chang Shan Liu, 67, of Maryland, Takchung Yeung, 58, of People's Republic of China (?); Harold Psalms, 72, of Illinois; Mohamad Aref, of Illinois; Mustafapha Kechtban, 53, of Illinois; Shugin Liu, 48, of Pennsylvania; Peter Yeung, 63 of California; Hua You, 45, of California.

Despite indictment, each of the defendants is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The case is being prosecuted in New Jersey by Assistant U.S. Attorneys Stephen Taylor and Hallie Mitchell.

Christie credited the following agencies for their extraordinary and cooperative work in the investigation: The FBI, under the direction of Special Agent in Charge Leslie G. Wiser Jr., in Newark; Immigration and Customs Enforcement in Philadelphia, under the direction of Special Agent in Charge John Kelleghan; the Bureau of Alcohol, Tobacco, Firearms and Explosives in Philadelphia, under the direction of Special Agent in Charge Mark Potter; the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, under the direction of Inspector General Gordon S. Heddell in Washington; the U.S. Secret Service in Philadelphia, under the direction of Special Agent in Charge Robert W. Slama; the Royal Canadian Mounted Police; the New Jersey State Police, under the direction of Superintendent Joseph R. Fuentes; the New Jersey Division of Gaming Enforcement, under the direction of Director Thomas Auriemma; the Atlantic City Police Department, under the direction of Chief Arthur C. Snellbaker; the New Jersey Division of Taxation, under the direction of Director Robert K. Thompson; the Hammonton Police Department, under the direction of Chief Frank Ingemi; the Hamilton Township, Atlantic County Police Department, under the direction of Chief Jay McKeen; the Mansfield Township Police Department, under the direction of Chief John Humbel.

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