Ellen Goldberg, NBC 5 News
Two Richardson men are among the 29 people accused of importing more than $300 million worth of knock-off shoes, purses and clothes through a New Jersey port.
Two North Texans were arrested in connection with what federal officials in New Jersey say is a massive international counterfeit goods operation.
Patrick Siu and Hai Jiang, of Richardson, are among the 29 people accused of importing more than $300 million worth of knock-off shoes, purses and clothes through a New Jersey port.
Richardson police confirmed that they escorted federal agents to a far northeast Richardson home Friday morning to arrest at least one of the men.
According to the criminal complaint, Siu was one of the ringleaders. Investigators said the group hid phony designer labels with generic ones and then removed the generic labels when the items cleared the port.
The criminal complaint quotes dozens of secretly recorded conversations, including one in which Jiang said fake cosmetics were "counterfeit but of good quality."
"All I care about is to make money," he added. "Other things do not matter."
Federal officials said Friday that the ring is one of the largest such scams ever uncovered.
"The cost of counterfeit goods is not limited to the massive financial harm it causes to American businesses and consumers," U.S. Attorney Paul Fishman said at a news conference. "The same channels and criminal networks that allow the entry of these goods provides the opportunity for the importation of other materials that threaten our health and safety."
Aside from UGG boots and cigarettes, the groups are accused of smuggling counterfeit Nike sneakers; fake Burberry, Gucci, Louis Vuitton and Coach handbags; and other clothing items. Three defendants are also charged with conspiring to import 50 kilograms of crystal methamphetamine.
Siu, 39, faces conspiracy and trafficking in counterfeit goods charges. Jiang, 32, faces charges of conspiracy and evading financial reporting requirements.
Twenty-five people, mostly in the New York-New Jersey region, were arrested by Friday night and the others were being sought, Fishman said.
According to indictments unsealed Friday, the counterfeit items were manufactured in China, then shipped to the U.S. in boxes that were deliberately mislabeled to keep shipping costs down. The goods came through the Port Newark-Elizabeth Marine Terminal, the busiest port on the East Coast.
From there, the goods were taken to warehouses in the area where co-conspirators would remove generic outer labels to expose the counterfeit brand name labels, according to the indictment. The goods were then sold to wholesale and retail outlets.
A tip received by Immigration and Customs Enforcement in northern Virginia led to an undercover effort that ultimately led to the arrests.
NBC 5's Ellen Goldberg contributed to this report.