U.S. District Judge Issues Arrest Warrant For Fugitive Charged With Smuggling Counterfeit Goods Into The U.S.

SAN FRANCISCO – A federal arrest warrant was issued for the arrest of Lixiong Chen, also known as John Chen, a defendant in an eighteen-count superseding indictment who failed to appear at what was supposed to be the first day of a jury trial, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge (San Francisco and Northern California) Ryan L. Spradlin.  The warrant was signed by the Honorable James Donato, U.S. District Judge. 

On April 25, 2019, a federal grand jury returned a superseding indictment charging Chen, 45, a citizen of China, with conspiracy, trafficking in counterfeit goods, and smuggling goods into the United States.  According to court documents, the government intended to prove that over the course of at least six years, the defendant illegally imported and sold small electronics, such as power adapters, that bore counterfeit trademarks.  The criminal trial in Chen’s case was scheduled to begin yesterday morning.  Nevertheless, on Sunday, June 23, 2019, Chen’s counsel filed a document with the Court stating, “defense counsel has just learned that Defendant Lixiong Chen will not be present for Court tomorrow morning, June 24, 2019, at 9 am.”  

At a hearing held in lieu of jury selection, Chen’s lawyers confirmed they did not anticipate the defendant would be present for trial at any point.  Further, attorneys for the United States informed the Court that they had received information indicating someone with Chen’s name boarded a flight to Beijing, China, that landed Sunday, June 23, 2019.  At the close of the hearing, Judge Donato issued a bench warrant for the defendant’s arrest.

Documents submitted to the court in anticipation of the trial describe the case against Chen.  While residing in China, Chen operated businesses, known as CBK Auto, CBK Holdings, CBK Wholesale, CBK USA, bestcompu.com, and Silicon Electronics, among other names, through employees in the United States.  Chen’s various businesses sold millions of dollars in electronic goods each year through online platforms such as Amazon and eBay.  The government alleges that a significant percentage of Chen’s business involved the sale of counterfeit goods. Further, the government alleges that Customs and Border Protection (CBP) agents repeatedly seized goods that violated U.S. law and could not legally be brought into the United States, but the defendant nevertheless continued to import counterfeit merchandise from China.  In sum, the superseding indictment charges Chen with nine counts of smuggling goods into the United States, in violation of 18 U.S.C. §  545; eight counts of trafficking counterfeit goods, in violation of 18 U.S.C. § 2320(a), and one count of conspiracy, in violation of 18 U.S.C. § 371. 

If convicted, the defendant faces the following maximum penalties:

• 18 U.S.C. § 371: 5 years of imprisonment, $250,000 fine, 3 years of supervised release, $100 special assessment, restitution.
• 18 U.S.C. § 545: 20 years of imprisonment, $250,000 fine, 3 years of supervised release, $100 special assessment, forfeiture, and restitution.
• 18 U.S.C. § 2320: 10 years of imprisonment, $2,000,000 fine, 3 years of supervised release, $100 special assessment, forfeiture, and restitution.

However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Following his arrest in January 2019, Chen was released by United States Magistrate Judge Kandis Westmore on a $1,000,000 bond secured by real property. He was also ordered not to travel outside of the Northern District of California, not to change residence without prior approval of Pretrial Services, and not to apply for any passports or other travel documents.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Anyone with information regarding the defendant’s whereabouts should contact Homeland Security Investigations at 1-866-347-2423. Callers outside the United States should call 802-872-6199.

Assistant United States Attorneys Michelle Kane and Matthew Parrella are prosecuting this case with assistance from Rebecca Shelton, Elise Etter, and Sarah Lamparelli.  The prosecution is the result of an investigation by HSI.