LOS ANGELES – A Los Angeles man who pleaded guilty to illegally engaging in the business of importing tobacco products was sentenced today to eight months in federal prison.
Zhi Xiong Chen, 56, of Chinatown, was sentenced by United States District Judge George H. Wu. In addition to the prison term, Judge Wu ordered the defendant to pay $152,278 to United States Custom and Border Protection.
From early 2011 until mid-2016, Chen illegally imported thousands of cartons of Chinese-made cigarettes without the necessary permits and without paying excise taxes.
Chen pleaded guilty in January to the felony offense of illegally engaging in the business of importing tobacco products 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 intended for Chen.
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.
This case was investigated by the Alcohol and Tobacco Tax and Trade Bureau, the U.S. Food and Drug Administration’s Criminal Investigations, United States Postal Service, 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.