Gisborne cigarette smuggling operation: Four sentenced, fined

Asian Food House in Grey St is where illegally imported Chinese cigarettes and tobacco were sold 539 times, according to a Gisborne District Court sentencing involving four defendants. The offending resulted in Customs revenue fraud of about $541,000.

A Customs operation investigating the smuggling of 230,600 cigarettes and 110 kilograms of tobacco from China has resulted in four Chinese nationals living in Gisborne being sentenced to home detention or fined.

Gisborne District Court heard on Tuesday that Customs (during what was titled Operation Apron), from October 10, 2023, to January 11, 2024, examined 132 airmail consignments of undeclared cigarettes and tobacco being sent to six addresses in Gisborne and Napier.

The offending resulted in defrauded Customs revenue of approximately $541,240.

The summary of facts said there were 539 instances where cigarettes and tobacco were sold at Asian Food House in Gisborne.

Jielong Liu, 35, who has permanent New Zealand residency and works at Asian Food House (in Grey St), and Jiepeng Liu, 31, who has a New Zealand work visa and works as a chef at Asian Food House, both pleaded guilty to defrauding Customs revenue and to a representative charge of importing prohibited goods.

The pair, along with Canbin Liu, 62, and wife Xueling Cao, 60 - who have permanent residency and own Asian Food House - all pleaded guilty to possessing uncustomed goods and selling uncustomed goods.

Jielong Liu was sentenced to eight-and-a-half months home detention and Jiepeng Liu to seven months home detention.

The married couple (Canbin Liu and Xueling Cao), who are the parents of Jielong Liu, were fined $10,400 and ordered to pay $260 in court costs.

The summary of facts said three cell numbers used as the consignee phone number on most of the 132 consignments were linked to Jielong Liu.

His name was used to sign for imported packages.

A search of the Gisborne home of Jielong Liu resulted in Customs finding 61 Chinese cigarettes, $10,000 in cash, notebooks with notes on the sale of cigarettes, phones and laptops.

The phones showed text conversations regarding cigarettes and images of cigarettes and cash.

Jiepeng Liu was present during the search, the summary of facts said.

He was in possession of $2389, 120 Chinese cigarettes and cellphones used to track parcels from China and which contained images of Chinese cigarettes.

His name had been used to sign for two imported packages.

The summary of facts said Canbin Liu and Xueling Cao were seen handing small brown bags to customers and being paid $20.

They were also seen loading items into a vehicle outside Asian Food House.

A search of the vehicle resulted in the discovery of $106,421 and empty Chinese cigarette carton packing.

In Asian Food House, Customs found 11,229 cigarettes and 1009 grams of loose tobacco.

Customs officers observed multiple people walking to the restaurant entrance and making cigarette-smoking gestures.

Customs also found CCTV footage which showed all four defendants selling cigarettes and loose tobacco from the Asian Food House.

The four defendants made 328 of the sales but the other 221 were made by three unknown people.

“Cigarette and tobacco sales significantly outnumbered food sales,” the summary of facts said.

Crown prosecutor Riki Donnelly said the Customs model was dependent on compliance and honesty. The fraud was well planned and premeditated.

The extent of the fraud committed by Jielong Liu and Jiepeng Liu was extensive.

Jielong Liu had offended over a period of 25 months and Jiepeng Liu over 14 months in a business opportunity consisting of importing and selling at street level.

Judge Warren Carthcart said he accepted Jiepeng Liu played a lesser role over a shorter period of time.

All four defendants had no previous convictions.

The judge said he would take into account the “personal circumstances” of Canbin Liu and Xueling Cao.

They had the capacity to pay the fine, he said.