Federal Jury Convicts Man in "Supernotes" Counterfeiting Case
Las Vegas, Nev. – Following a seven-day federal jury trial, a Los Angeles man was convicted today of conspiracy for his role in coordinating the delivery, exchange and sale of thousands of high quality counterfeit $100 bills that were transported into the United States from foreign countries, announced Greg Brower, United States Attorney for the District of Nevada.
Chen Chiang Liu, 45, was found guilty of one count of Conspiracy to Deal, Sell and Pass Counterfeit U.S. Currency and one count of Fraudulently Passing and Keeping Counterfeit U.S. Currency.
"Every American is a victim of counterfeit U.S. currency," said U.S. Attorney Brower. "As this case shows, federal authorities will vigorously pursue those who manufacture and traffic in counterfeit dollars and bring them to justice."
According to the court records and evidence introduced at trial, in April 2004, Chen Chiang Liu and other members of the conspiracy offered an undercover FBI agent high quality counterfeit $100 bills. Often referred to as "Supernotes," the conspirators informed the undercover agent that the counterfeit bills were manufactured by unidentified suppliers and co-conspirators outside of the United States. As part of the conspiracy, Liu and a coconspirator met with the undercover FBI agent in March 2005 to negotiate the sale of Supernotes and terms of payment. The conspirators delivered Supernotes with an approximate face value of $2,000,000 to the agent from April to August 2005.
During this period, the conspirators also sold Supernotes to Patrick Schwenke. From April to August 2005, Schwenke made four trips to Hong Kong where he received Supernotes with a face value of over $1.5 million. Additionally, in August 2005, Schwenke made another trip to Hong Kong to purchase additional Supernotes with an approximate face value of $1,000,000. However, when he arrived in Hong Kong, he was informed that the Supernotes were unavailable because the conspirators had been arrested in the Central District of California.
Chen Chiang Liu was granted pretrial release in the Central District of California. While on pretrial release, Liu met with Schwenke and others on multiple occasions, including several meetings in Las Vegas, to discuss further Supernote transactions. Although several members of the conspiracy were imprisoned, Liu advised Schwenke that his foreign contacts could continue to supply Supernotes. Pursuant to these discussions, Schwenke traveled to Beijing to receive additional Supernotes. However, Scwhenke was informed that the supplier of the Supernotes had been unable to travel to Beijing. Before this deal could be completed, Schwenke was arrested and charged with another offense in the Western District of North Carolina. As part of his plea agreement in that case, he agreed to cooperate with law enforcement.
In the course of the conspiracy, conspirators on several occasions told the undercover agent that the Supernotes could be passed in Las Vegas casinos. The conspirators made similar remarks to Schwenke and encouraged him to exchange Supernotes for genuine currency in Las Vegas. The exchange of Supernotes for genuine United States currency in Las Vegas was an integral part of the conspiracy. Despite his arrest and restrictions on his travel, from 2005 through July 2007, Liu and his wife frequently traveled to Las Vegas where they wagered millions of dollars and sustained net losses exceeding $160,000. In July 2007, Liu was arrested by U.S. Secret Service Agents in Las Vegas after passing scores of Supernotes into penny slot machines at Caesars' Palace. Following his arrest, law enforcement agents found two additional Supernotes in Liu's pocket and 301 Supernotes in the Lius' vehicle.
Liu is scheduled to be sentenced by U.S. District Judge James C. Mahan on December 16, 2008. He faces up to five years in prison and a $250,000 fine on the conspiracy charge and up to 20 years in prison and a $250,000 fine on the fraud count.
The case was investigated by the United States Secret Service and FBI with the assistance of other federal and state agencies, and prosecuted by Assistant United States Attorney Timothy S. Vasquez.