Free Complaint - District Court of Delaware - Delaware

Case 1 :08-cr—00027—JJF Document 1 Filed 01/17/2008 Page 1 of 4
AO 91 (Rev. 12/93) Criminal Complaint I!]
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United States District Court =
DISTRICT OF DELAWARE l
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UNITED STATES OF AMERICA Criminal Complaint ’
v. CASE NUMBER: 08- [ O]`.1 l
CHUNG HANG CHENG, i
a/k/a JAMES CHENG
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(Name and Address of Defendant) 1
I, the undersigned complainant, being duly sworn, state the following is true and correct to the best of my knowledge and belief On or i
about J anuaig 16, 2008 in New Castle County, in the District of Delaware, defendant did knowingly ship, transport, receive,
possess, sell, distribute, or purchase contraband cigarettes, l
in violation of Title 18 United States Code, Section(s) 2342g a) .
I further state that I am a(n) Special Agent, ATF and that this complaint is based l
Official Title V
on the following facts: l
See attached Affidavit
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Continued on the attached sheet and made a part hereof: Yes &
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Signature of Complainant
Tat S. Shum I
Special Agent, ATF 1
Sworn to before me and subscribed in my presence, I
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Januag 17, 2008 at Wihnington, DE .. i
Date City and State .. 1
Honorable Mary Pat Thynge E
United States Magistrate Judge ‘ Q
Name & Title of Judicial Officer Signature of Judicial Offi `
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AFFIDAVIT OF SPECIAL AGENT TAT SHUM
1. Your affiant is Special Agent Tat S. Shum. Your affiant has been a law enforcement I
officer for over eight years with the Bureau of Alcohol, Tobacco, Firearms, and Explosives *
(ATF). As part of my duties, responsibilities and training, and in the course of my investigative r
experience, I have become familiar with the statutes, rules and regulations, policies and
procedures, relating to the Bureau of Alcohol, Tobacco, Firearms and Explosives, including but A
not limited to the contraband cigarettes trafficking, and other laws enforced by the Bureau of .
Alcohol, Tobacco, Firearms and Explosives. I am a graduate of the Federal Law Enforcement
Training Center, Glynco, GA, Criminal Investigation Course and the Bureau of Alcohol,
Tobacco and Firearms New Professional Training Course. Prior to my employment with ATF, 7
your affiant was employed bythe Pennsylvania State Attorney’s Office as a State Narcotics
Agent. Your affiant was also previously employed by the First Judicial District of Pennsylvania,
Common Pleas and Municipal Courts, as a warrant unit investigator for the County of
Philadelphia. r
2. Unless otherwise stated, the information in this affidavit is based upon your affiant’s I
personal knowledge. j
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3. The seizure of the below stated contraband cigarettes occurred on January 16, 2008, inthe
City of Wilmington, State and District of Delaware from a multi-agency buy bust operation.
4. In June 2007, under the joint collaborative law enforcement effort with state agents of the E
Delaware State Department of Safety and Homeland Security (DSHS) Division of Alcohol &
Tobacco Enforcement (ATE) and state special investigator of the Delaware Division of Revenue
(DOR) Criminal hrvestigation Unit in a proactive tobacco diversion investigation, your affiant
and state investigators uncovered that a Chinese food take-out restaurant located in Wihnington,
Delaware was selling illicit counterfeit contraband cigarettes to city residents. The owner of the
restaurant was initially found in violation of Delaware State laws in Title 30 Section 5342
Possession of Untaxed Tobacco Products, Title ll Section 1120 Selling Tobacco Products not in
Manufacturer Packaging, and Federal law & regulations in 27 CFR parts 40 and 275 by selling
single and loose cigarettes to customers due to the fact that dealers must sell cigarettes or other
tobacco products in the original manufacturer packs/cartons. Investigators also learned that the
operators of the restaurant may have also illegally sold single cigarettes to underage! children in
order to capitalize their business profit based on prior surveillance.
5. Further investigation by the multi-agency investigators on the restaurant including the
affiant led to the identification of the counterfeit cigarette trafficker/ supplier, Chung Hang
CHENG aka JAMES CHENG. CHENG had allegedly distributed and sold approximately a total
of sixty (60) assorted cartons of counterfeit Marlboro and Newport brand cigarettes to the
restaurant on or about 9/22/06 and in or around March 2007 in violation of 18 USC 2320
Trafficking in counterfeit cigarettes.
6. An NCIC and DELJ IS check revealed that CHENG is a repeated tobacco diversion

Case 1 :08-cr—OOO27—JJF Document 1 Filed O1/17/2008 Page 3 of 4
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offender who was previously arrested by the Delaware State Police and the ATE for food stamp
trafficking, conspiracy, selling tobacco products to underage minors and other related offenses.
An immigration status check assisted by the U.S. Immigration and Customs Enforcement’s agent
indicated that CHENG is an ethnic Chinese and a naturalized US citizen, '
7. Based on the ATF bureau’s intelligence information and the personal knowledge of this
affiant, the counterfeit cigarettes involved with ethnic Chinese traffickers are commonly
imported from China illegally and the transnational contraband cigarette trafficking schemes are .
commonly controlled by sophisticated Asian Organized Crime (AOC) smuggling groups and
their criminal syndicates. It is not known if CHENG is a member of an AOC group, their l
criminal syndicates and or their associates or business partners. His role in the distribution
channels for the illicit counterfeit contraband cigarettes is unknown. i
8. With the cooperation of a state cooperating witness (CW), ten (10) additional cartons of p A
Newport counterfeit cigarettes were purchased from CHENG on 9/ 10/07 and forty-six (46) {
additional cartons of assorted counterfeit cigarettes were purchased from same on 12/ 14/ 07 from
a controlled purchase. lt should be noted that the transaction on 12/14/07 was video recorded by
the affiant. The state cooperating witness reported that he had observed additional cases of
suspected counterfeit cigarettes inside of CHENG’S car during their previous two transactions p
and CHENG had told the CI that he had sold cigarettes to other restaurants on Market Street, A
Wilmington, Delaware. It is suspected that CHENG has been supplying multiple Chinese
restaurants in the Greater Wilmington area with counterfeit cigarettes for retail sale. I
9. Recent telephone contact from the CW to CHENG on January ll, 2008 revealed that ,
CHENG is willing to sell an additional one hundred sixty (160) assorted cartons of (counterfeit) i
cigarettes to the CW for 25.00 per carton at a total of $4000.00USC. The telephone conversation l
was consensually monitored and recorded by ATE state Case Agent Price, assisted by ATF SA
Tat Shurn. ¤
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10. Investigation revealed that CHENG is highly security cautious due to the fact that he has
used different cellular telephones to contact the CW and he showed up on different schedules l
during the last two undercover transactions. CHENG was observed operating a tan 2004, Chevy
blazer, Delaware Registration PC802236 which is registered to an abandoned commercial
property on 3060 New Castle Avenue, New Castle, Delaware 19720. His current driver’s license 1
has the same invalid address listed and the investigators were unable to determine the location of
his current home from prior surveillance. 1
ll. With the cooperation of the same CW, a buy bust operation was initially set up on
January 17, 2008 at 0900 am. CHENG showed up at CW’S restaurant at 1920 hours on January
16, 2008 unexpectedly. Your affiant was able to provide the CW with pre-recorded $4000USC
for purchase money and subsequently a buy bust was occurred at approximately 2100 hours i
during the same. One hundred seventy-seven cartons of assorted cigarettes and the ATF pre- l
recorded $4000USC evidence purchase fund were recovered from CHENG during the buy bust
transaction. Your affiant conducted a hands—on inspection on the evidence and confirmed that l
one hundred twenty—six cartons ofthe cigarettes bear no Delaware tax stamps. A field test was
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Case 1 :08-cr—OOO27—JJF Document 1 Filed O1/17/2008 Page 4 of 4
also conducted and it is revealed that the cigarettes are counterfeiters. J
Vlfherefore, based upon your afiiant’s training and experience, your afiiant believes that p
there is probable cause to believe that the defendant violated 18 U.S.C. 2341 by possessing over j
10,001 cigarettes with no tax stamps and re pectfully requests that the Court issue a Criminal i
Complaint charging that offense.
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t S. Shum
Special Agent, ATF

Sworn to and subscribed in my presence l
this 17 h da f January, 2008 p
w e Mary Pa ge
‘ I . - • tates Magis rate Judge 1
District of Delaware
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