Jail Term For $4.9 Million Tobacco Fraudster

A man was sentenced in the Auckland District Court today on charges of defrauding the revenue of Customs and money laundering after being linked to two shipments containing a total of 4.2 million cigarettes.

38-year-old man Hoong Ping Lee was sentenced to two years and four months’ imprisonment for defrauding the revenue of Customs and money laundering, while his 32-year-old accomplice Qiaoye Wang was sentenced on 27 May 2022 to six months’ home detention for defrauding the revenue of Customs. They were convicted for evading a total of $4,946,605.90 million in taxes.

Customs arrested the pair as part of Operation Odin in mid-September 2020, which resulted the arrests of four people for various roles in an organised tobacco smuggling operation. In 2021 two of the offenders were convicted, sentenced for jail time and subsequently deported.

The investigation began in July 2020, when Customs intercepted 2.2 million cigarettes concealed in construction materials sent from Malaysia. Customs’ enquiries identified three Malaysian nationals and one Chinese national who had a range of roles in the enterprise. This included setting up a shell company, retrieving the smuggled cigarettes from within the shipment, distributing the smuggled cigarettes, and then laundering the cash proceeds.

Customs investigators executed search warrants in September 2020 at their residential addresses, seizing approximately $34,000 in cash and other evidence of cigarette sales.

Customs also charged them with a previous shipment of 2 million smuggled cigarettes hidden inside similar construction material.

Cam Moore, Customs Investigations Manager, welcomed the sentencings, saying these convictions are further evidence that organised criminal groups see large-scale tobacco smuggling and money laundering as a profitable crime.

“Criminals who engage in tobacco smuggling can expect to lose their ill-gotten gains and face serious criminal charges.

“These sentencings show that Customs will take every effort to disrupt the illicit trade in cigarettes and seize criminal proceeds. We are fully focussed on disrupting and dismantling criminal networks in the tobacco black market.”

In a separate investigation, 28-year-old man Jianyuan Chen was sentenced to two years and four months’ imprisonment in February 2022 for defrauding Customs revenue, manufacturing cigarettes at his residential address, and cultivating cannabis.

The various items needed for the manufacturing operation which included loose tobacco, packaging material and cigarette making machine were imported by Chen in multiple air and sea freight consignments from China.

He was arrested in March 2021 when Customs investigators executed a search warrant at his Auckland address and found 271 kilograms of tobacco and equipment for manufacturing cigarettes including counterfeit branding for a popular Chinese cigarette brand. A number of cannabis seedlings were also located at the address.

If you have suspicions about someone involved in illegal smuggling, call 0800 WE PROTECT (0800 937 768) orCrimestoppers anonymously on 0800 555 111.

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