‘AO 106 (Rev. 0410) Application fora Search Warrant UNITED STATES DISTRICT COURT for the District of Oregon FIL ORUSICARP In the Matter of the Search of eee ely desribe the property o be searched reba theperch ipnce end cadres) APPROXIMATELY 192 FIFTY-FIVE GALLON DRUMS. OF MALT SWEETENER LOCATED AT CAPITOL GOLD STORAGE, 1440 SALEM INDUSTRIAL DR. NE, SALEM APPLICATION FOR A SEARCH WARRANT. Case No. 11 -0-9067 1,2 federal law enforcement officer or an attorney for the government, request a search warrant and state under penalty of perjury that I have reason to believe that on the following person of property idem the person or desribe the property tobe searched and gv is locaton CAPITOL COLD STORAGE, 1440 SALEM INDUSTRIAL DR. NE, SALEM, OREGON located in the __ District of Oregon _ othe ‘perton or desrib the property tobe seed): ‘APPROXIMATELY 192 FIFTY-FIVE GALLON DRUMS OF COMPOUND MALT SWEETENER LOCATED AT CAPITOL COLD STORAGE, 1440 SALEM INDUSTRIAL DR. NE, SALEM, OREGON is now concealed cidenify the ‘The basis for the search under Fed. R. Crim. P, 41(c) is (heck one or more: evidence of a crime; & contraband, fruits of crime, or other items illegally possessed; & property designed for use, intended for use, or used in committing a crime; J a person to be arrested or a person who is unlawfully restrained. The search is related to a violation of: ade Section Offense Degeriliedto be a true and correct Tie BUSS Sotion 542 Eniryof Goods by means of oles tse gay of eign fled ts Dist Dated f Mary L_ Moran, Clerk of Court “The application is based on these facts: US District Court of By Deputy Clerk Pages: Continued on the attached sheet 1 Delayed notice of __days (give exact ending date if more than 30 da under 18 U.S.C. § 3103a, the basis of which is set forth “or sheet ‘rina Ledbetter, Special Agent ICE Print name and tide ‘Sworn to before me and signed in my presence. % Date: ___ 03/10/2014 — Dee DE erate Thadge's signa City and state: Portland, Oregon Janice M. Stewart, U.S. Mag Printed name and ileUNITED STATES OF AMERICA ) AFFIDAVIT OF ‘TRINA LEDBETTER | DISTRICT OF OREGON 1, Trina Ledbetter, being first duly swom, depose and say: INTRODUCTION 1. The information contained in this affidavit is submitted in support of a seizure warrant for approximately 192 fifty-five gallon drums imported into the United States as compound malt sweetener from China and later introduced into United States commerce as Thai honey through the use of false and fraudulent shipping documents, bills of lading, and other records. The merchandise is presently located at Capitol Cold Storage, 1440 Salem Industrial Dr. NE, Salem, OR 97301 under the control of Cascade Warehouse Company (“Cascade Warehouse”), 1330 Salem Industrial Drive, Salem, Oregon 97301. | 2. Lama Special Agent (SA), with the United States Department of Homeland Security, | United States Immigration and Customs Enforcement (ICE), formerly United States, Immigration and Naturalization Service, assigned to Homeland Security Investigations (HSI) in Portland, Oregon. HSI is responsible for enforcing the Customs laws, Immigration laws, and federal criminal statutes of the United States. I am a law enforcement officer of the United States within the meaning of Section 2510(7) of Title 18, United States Code, and I am authorized by law to conduct investigations and to make arrests for felony offenses, | 3. Ihave been a federal law enforcement agent for almost nineteen years. I have | investigated and/or participated in many federal criminal investigations involving PAGE 1 - AFFIDAVITtrafficking in counterfeit goods or services, seizing counterfeit merchandise and the proceeds from the sale of counterfeit merchandise, fraud, smuggling, identity theft | and related illegal alien activity, human trafficking, and’child pornography. Tam also | conducting investigations of Chinese honey fraudulently imported into the United States. 4, As aresult of my training and experience, I am familiar with federal laws that prohibit smuggling merchandise into the United States, that prohibit fraudulently importing ‘merchandise into the United States, and that prohibit using false and fraudulent documents to introduce this merchandise into the commerce of the United States. 5. Title 18, United States Code, Section 542, Entry of goods by means of false statements, states in pertinent part: Whoever enters or introduces, or attempts to enter or introduce, into the commerce of the United States any imported merchandise by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by | means of any false or fraudulent practice or appliance, or | makes any false statement in any declaration without reasonable cause to believe the truth of such statement, or procures the making of any such false statement as to any matter material thereto without reasonable cause to believe the truth of such statement, whether or not the United States shall or may be deprived of any lawful duties; or Whoever is guilty of any willful act or omission whereby the United States shall or may be deprived of any lawful duties accruing upon merchandise embraced or referred to in such invoice, declaration, affidavit, letter, paper, ot statement, or affected by such act or omission— is guilty of a federal criminal offense. 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Title 18, United States Code, Section 981 (a)(1)(C) states the following property is subject to forfeiture to the United States: “. . . any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section ...542... of this title.” 7. ‘The facts set forth in this affidavit are based on: my own personal knowledge; knowledge obtained from other individuals during my participation in this investigation; public records and computer database searches; review of documents related to this investigation; and communications with others who have personal knowledge of the events and circumstances described herein, 8, Because this affidavit is submitted for the limited purpose of establishing probable cause to seize the merchandise identified herein, this declaration does not set forth everything I know or that has been compiled concerning this investigation, Rather, I have set forth only those facts that I believe are necessary to establish probable cause to believe that the merchandise was imported into the United States then introduced into United States commerce using false and fraudulent shipping documents, bills of lading and other records, thereby violating Section 542 and rendering the merchandise forfeitable to the United States. SUMMARY OF INVESTIGATION, 9. Customs and Border Protection (CBP) is responsible for, among other things, 1) the examination of merchandise entering the United States to ensure that it is admissible and in compliance with United States laws; and 2) the assessment and collection of taxes, fees, and duties on imported merchandise, including antidumping duties. A customs house broker or agent normally handles the process of entering goods into PAGE 3 - AFFIDAVITthe United States on behalf of an importer, which includes the filing of entry documents with CBP based on information provided by the importer. The proper functioning and process by which merchandise enters the United States is dependent on accurate and truthful reporting by those providing information at a United States customs house. 10. CBP Forms 3461 (Entry/Immediate Delivery) and 7501 (Entry Summary) require importers to provide specific and truthful information relating to imported merchandise, including a brief description of the merchandise, the merchandise’s ‘manufacturer, its value, and its country of origin. CBP officials rely on the truth and accuracy of this information to determine whether to approve the entry of the ‘merchandise into the United States and to determine applicable duties owed to the United States. 11, The government is investigating certain individuals and entities for importing compound malt sweetener into the United States then using false and fraudulent documentation to introduce it into the commerce of the United States as honey, in violation of Title 18, United States Code, Section 542. 12. The drums to be seized were originally part of 448 drums imported and entered in the United States as compound malt sweetener at the Port of Chicago, Illinois, in October 2009. 13, The 448 drums were the sole content of seven shipping containers identified on Customs entry documents with the following numbers: FCIU 3845357, TTNU 3120559, TTNU 3352889, TTNU 3667438, TTNU 1405146, TTNU 1725978, and TINU 3680300. PAGE 4 - AFFIDAVIT14, The Customs entry documents for these shipping containers identified Easter Commodity Company as the importer. A customs house broker entered four of these containers on October 10, 2009 and three of these containers on October 25, 2009. 15. These seven shipping containers were accompanied by invoices, packing lists, certificates of quality, and bills of lading. These documents identified the merchandise as compound malt sweetener. These documents also identified the drums as being shipped from a food producer located in Hong Kong. ‘The certificates of quality described the drums as “90% of RICE SYRUP, 10% of HONEY.” The certificate of quality also stated that the merchandise was manufactured “under carefully controlled environments, rice syrup and honey are mixed at a nine to one ratio.” Labels on the drums indicated the compound malt sweetener originated in China. FOUR CONTAINERS OF MERCHANDISE ENTER UNITED STATES (COMMERCE WITH FALSE DOCUMENTATION 16. After CBP released the containers, four of them moved to Warehouse 1, located in Wisconsin, Two of these containers, using legitimate container numbers FCIU 3845357 and TTNU 3120559, arrived at Warehouse 1 on October 16, 2009. A third container, using legitimate container number TTNU 3352889, arrived on October 19, 2009, and a fourth container, using legitimate container number TTNU 3667438, arrived on October 20, 2009. 17. On October 20, 2009, an employee of Warehouse | received an email from “Anne” in reference to the four containers. Anne’s email to the warehouse had an email address indicating Anne’s association with Eastem Commodity Company. Anne’s email stated, “My customer’s name is Lynn...” and provided Lynn’s email address. PAGE 5 - AFFIDAVIT18. A few minutes later on October 20, 2009, an employee of Warehouse 1 received an email from “Lynn” stating: “This is my company name is [company name redacted]. My supplier (Eastern Commodity Company) advise me that all my cargo are in your warehouse. So I will contact with you for next all things.” 19, About 5 hours later on October 20, 2009, an employee of Warehouse 1 received another email from “Lynn,” stating iri reference to the four shipping containers, “There are 2 labels on the drums. We need you removing them completely.” One of the two types of labels were Chinese Inspection and Quarantine (CIQ) hologram stickers, ‘The presence of the CIQ hologram stickers indicated the merchandise was of Chinese origin 20. On October 21, 2009, an employee of Warehouse 1 received an email from “Lynn”, stating in reference to product labels on the drums, “There are my supplier's information on it, But we don’t [want] my customer [to] know that information. So we need you removing all labels.” My understanding is that “Lynn” wanted these labels removed from the drums because the supplier information on the labels would indicate to United States customers that the merchandise was of Chinese origin. 21. During the same series of emails sent on October 20 and October 21, 2009, “Lynn” asked the employee of Warehouse 1 to send her photos of the drums without the labels on them. “Lynn” indicated that the barrels would not be moved until the labels were removed. Warehouse employees removed all the labels from the drums and discarded most of them. The warehouse operator alerted ICE about this suspicious PAGE 6 - AFFIDAVITactivity and an ICE agent retrieved a few of the CIQ hologram stickers that had not been discarded. I have reviewed photographs of some of these C1Q hologram stick removed from the drums. 22. On October 28, 2009, an employee of Warehouse | received an email from “Lynn,” stating in reference to these four shipping containers (and to three additional containers that made up the total shipment): “We need [to] use the REF# instead of the CTN#, when they [ship] out of your ‘warehouse, also use the REF#. CTN# REF# FCIU 3845357 HSUC 3843802 TTNU 3120559 HSUC 3119004 TINU 3352889 HSUC 3351334 TINU 3667438 HSUC 3665883 TINU 3680300 HSUC 3678745 TINU 1725978 HSUC 1724423 TTNU 1405146 HSUC 1403591” 23, Based on my training and experience and my familiarity with fraudulent schemes relating to Chinese honey, I believe Lynn was instructing the warehouse employee to use fictitious container numbers on future shipping paperwork instead of using the correct container numbers in order to conceal that the drums had entered the United States as compound malt sweetener of Chinese origin. 24, Between approximately November 10 and 11, 2009, the drums of compound malt sweetener from four of these shipping containers were transported to a honey packer in the Midwest. The shipping paperwork identified the merchandise using the following four fictitious container numbers that “Lynn” supplied: HSUC 3843802, HSUC 3119004, HSUC 3351334, and HSUC 3665883. Bills of lading for shipping PAGE 7 - AFFIDAVITthe merchandise from Warehouse 1 to the honey packer falsely and fraudulently described the merchandise as “Thai honey” in fulfillment of four of the honey packer’s Purchase Orders for’Thai honey. False CBP entry documents, packing lists, and bills of lading from the steamship company fraudulently described the merchandise as Thai honey. This means that on approximately November 10 or November 11, 2009, this merchandise was introduced into the commerce of the United States by means of fraudulent and false invoices, declarations, and other documentation, in violation of Title 18, United States Code, Section 542. 25. The investigation continues into who created the false documents describing the ‘merchandise as Thai honey and how these false documents became associated with shipping the merchandise to the honey packer in the Midwest 26. The honey packer in the Midwest then rejected this merchandise. 27. Between approximately April 9 and 12, 2010, the merchandise (approximately 256 drums of compound malt sweetener) identified with fictitious container numbers HSUC 3843802, HSUC 3351334, HSUC 3665883, and HSUC 3119004 was ‘transported from the honey packer in the Midwest to a warehouse in Illinois (hereinafter, “Warehouse 2”) 28. On June 24, 2010, an employee of Warehouse 2 received an email from “Busarin” relating to this merchandise. The email stated in part: “. amy customer's trucker... will contact with you to make a pickup schedule, ‘They will pickup all containers by their REF¥, I will send the BOLs to you later. Container number REF# HSUC 3843802 (003494) EMCU 3828252 HSUC 3119004 (003495) EMCU 3103454 PAGE 8 - AFFIDAVITHSUC 3351334 (003496) EMCU 3335784 HISUC 3665883 (003497) EMCU 3650333” 29, The investigation continues into who Busarin is and his connection to Eastem Commodity Company. 30, Based on my training and experience and my familiarity with fraudulent schemes relating to Chinese honey, I believe that Busarin was instructing the warehouse employee to use a second set of fictitious container numbers on future shipping, paperwork instead of using the correct container numbers to further conceal that the drums had entered the United States as compound malt sweetener of Chinese origin. 31. In o about June 2010, this merchandise was transported to a different honey packer in the Midwest, Bills of lading for this shipment described the merchandise as “Thai honey” and used the fictitious container numbers Busarin supplied: EMCU 3828252, EMCU 3103454, EMCU 3335784, and EMCU 3650333. Documents describing the ‘merchandise as honey — not “Compound Malt Sweetener” — accompanied the merchandise. 32. In late July and early August 2010, the second honey packer in the Midwest rejected approximately 192 drums of the merchandise. ‘These drums were identified by fictitious container numbers EMCU 3828252, EMCU 3335784, and EMCU 3650333. 33. On or about August 19, 2010, these approximately 192 drums of compound malt sweetener, falsely and fraudulently described as “Thai honey”, were transported from the second honey packer fo a warehouse in Wisconsin (hereinafter, “Warehouse 3") ‘These drums were transported using the same fictitious container numbers: EMCU 3828252, EMCU 3335784, and EMCU 3650333. PAGE 9 - AFFIDAVIT