Sentencing was delayed Monday until Tuesday for a Los Angeles County man who admitted his role in a scheme to smuggle millions of dollars’ worth of contraband from China into the United States via the ports of Los Angeles and Long Beach.
Chenyu Zhao, 32, of Hacienda Heights, operated a warehouse in the city of Industry that was used to smuggle counterfeit and other illegal cargo into the country, circumventing the U.S. Customs and Border Protection inspection process, according to the U.S. Attorney’s Office.
Zhao pleaded guilty in April in Los Angeles federal court to a charge of conspiracy to smuggle and break customs seals.
Court papers show Zhao helped direct cargo shipping containers flagged for CBP secondary inspection to unauthorized off-site locations, where accomplices unloaded the contraband in the containers, replaced it with filler cargo, and then returned the cargo containers to CBP for inspection, in an attempt to deceive customs officials and evade law enforcement.
To date, the U.S. Attorney’s Office said, law enforcement has seized more than $1.3 billion worth of contraband associated with this and similar cargo-swapping schemes.
Zhao’s attorney could not be reached for comment.
According to court documents, a search of one warehouse linked to the case led to the seizure of quantities of counterfeit goods, including luxury handbags and footwear, as well as nearly 43 pounds of an illicit steroid.
Zhao admitted in his plea deal that he and others maintained and operated warehouses to store, conceal and sell large amounts of contraband cargo that was illegally imported into the United States from China.
On at least 20 occasions when the illicit containers were selected by CBP for inspection, commercial truck drivers were hired to transport the containers from the ports to locations that the conspirators controlled, including the city of Industry warehouse maintained by Zhao, according to court papers.
Zhao and others paid fees to co-conspirators that were substantially above normal trucking fees to transport the contraband shipping containers. As stated in the complaint, as much as $15,000 was paid to divert a single cargo container in December 2024.
The scheme resulted in a direct loss to the United States of nearly $11 million in lost duties from goods that evaded customs inspection, according to the government’s sentencing papers.
Federal prosecutors are recommending a low-end prison sentence of 46 months. Mitigating factors include the fact that Zhao has no prior convictions and appears to have been a smaller cog in a much larger smuggling operation. Also, Zhao does not appear to have greatly benefited financially from the scheme, according to the U.S. Attorney’s Office.
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