Shandong Court Sentences Suspects in Massive E-cigarette Case

On June 15th, the Zhangdian District People's Court in Zibo City, Shandong Province, handed down the first batch of verdicts on the major illegal production and sale of counterfeit e-cigarette network case that occurred on March 2nd in Zibo City. 11 suspects were legally punished, with 9 of them being sentenced to more than 5 years in prison and a total fine of over 1.41 million yuan. This has created a strong deterrent effect on illegal criminals.

The case originated from a diligent citizen reporting a tip to the 12313 tobacco market supervision service hotline. With the strong sense of responsibility of the enforcement officers towards the reported tip, and the unremitting efforts of the public security, procuratorate, and tobacco bureaus, this major national standard network case was eventually successfully investigated and reported to the Ministry of Public Security by the Shandong Provincial Public Security Department for further supervision.

The case involves multiple aspects of the e-cigarette industry, including production, transportation, warehousing, wholesale, and retail. It is a full-chain illegal network involved in manufacturing and selling counterfeit e-cigarettes, with a wide geographical reach, involving numerous individuals, and a high value of illegal transactions. It spans over 9 provinces and more than 10 cities across the country, with an estimated value of about 1 billion RMB.

Hotline report leads to uncovering counterfeit production leads.

On February 10, 2023, the Zhangdian District Tobacco Monopoly Bureau received a report transferred from the Shandong Provincial Tobacco Monopoly Bureau 12313 hotline sub-center. The report indicated that in the vicinity of the Zibo Wanxianghui Shopping Mall, there have been frequent visits by minors to a certain leisure bar, where they are purchasing various types of "milk tea cup" e-cigarettes. Based on the case clues, the tobacco department immediately joined forces with the public security department to organize a task force to investigate and verify the situation, and conducted surveillance and monitoring.

On February 15, 2023, after preliminary investigation of the illegal activities, the Zhangdian District Bureau, in conjunction with the public security department, conducted a surprise inspection of a leisure bar and seized 322 fake e-cigarettes filled by the individual Dong, as well as 3127 milliliters of low-quality fruit-flavored liquids. Upon further investigation, law enforcement officers found that Dong was illegally operating on a large scale and suspected of committing the crime of illegal business operations. The case was transferred to the public security agency on February 21. Through further investigation and analysis, the public security agency found that Dong was involved in the production of counterfeit e-cigarettes and officially opened a criminal case on March 2, 2023. A special task force was established to continue the investigation.

Peel away the layers to depict the criminal network.

With the careful cooperation of the public security and tobacco departments, the task force has strengthened its awareness of intelligence-led investigation. Through the analysis of multiple investigative techniques at the "Zibo Police and Tobacco Big Data Operation Center," Dong, in Guangdong, and his superior Liao have come into the focus of the task force.

Through big data analysis, it was discovered that Liao, as an intermediary, was part of a large criminal network involving the production, transportation, wholesale, and retail of counterfeit e-cigarettes. This network vigorously produced substandard counterfeit e-cigarettes, with many individuals involved, widespread distribution areas, and large transaction amounts, seriously endangering the national interests and the health of the people, especially young people.

After multiple analyses, collisions, and judgments by the special task force, the overall investigative approach of breaking through the midstream transportation link of counterfeit e-cigarettes, shutting down production sites at the upper end, and cracking down on distribution routes at the lower end was finally confirmed.

Covering a distance of a thousand miles, the operation successfully destroyed the main factory.

After thorough analysis and planning, on June 6, 2023, the special task force took unified action and divided into five groups to quickly travel to Guangdong.

In the first operation, officers traveled to Foshan City and arrested three suspects, including Chen, who were transporting e-cigarettes. Over 30,000 counterfeit e-cigarettes were confiscated on the spot. Chen was criminally detained and later approved for arrest on July 13th.

The second team went to Shenzhen and arrested key figures Liao and his accomplice Zhang, who were criminally detained. They seized over 400,000 yuan in cash at the scene. Liao and Zhang were approved for arrest on July 13th.

A joint operation led to the arrest and criminal detention of two partners involved in the production of counterfeit e-cigarettes in Zhongshan City. Over 60,000 yuan in cash was confiscated at the scene. The two individuals, including a person named Yin, were approved for arrest on July 13th.

The fourth team rushed to Dongguan City, where they arrested and criminally detained Guan Mou and Fu Mou, supervisors of the counterfeit factory; on the same day, they also arrested Zhang Mou, who is suspected of providing funds, and Chen Mou, who was harboring criminals, and released them on bail pending trial. On June 20, the special task force arrested and criminally detained Dong Mou, the general manager of Shenzhen Industrial Co., Ltd., a counterfeit factory owner in Dongguan City. Dong Mou was approved for arrest on July 13.

The couple, Li and his wife, who were involved in the production of low-quality e-liquid and were attempting to flee to Thailand, were apprehended at the immigration point at Shenzhen Bao'an Airport on Fifth Road. They have been criminally detained, with Li being approved for arrest on July 13th.

Thoroughly investigate and uncover all aspects of the online network.

The task force further identified 21 suspects involved in the production of counterfeit e-cigarettes by analyzing the commercial flow, logistics, fund flow, and information flow of the individuals involved in the manufacturing factory. Their identities were confirmed one by one. By investigating the fund flow of key personnel in the distribution chain through their bank accounts, Alipay, and WeChat, 20 suspects involved in the sale of counterfeit e-cigarettes nationwide were identified and their identities were confirmed as well.

In July and August 2023, a task force pursued and arrested a total of 41 criminal suspects in the e-cigarette industry. More than 100 personnel from the public security and tobacco departments traveled over 100,000 kilometers to capture these suspects. In just 3 months, the Zibo public security and tobacco departments successfully apprehended a total of 54 suspects involved in various aspects of the e-cigarette criminal network, including production, transportation, wholesale, retail, harboring, and providing facilities, funds, and technology. This rapid operation demonstrated their ability to effectively dismantle the entire chain of the e-cigarette criminal network.

In the case, a total of 54 criminal suspects were captured, including 2 fugitives from overseas. Three counterfeit production factories were shut down, with over 30,000 fake disposable e-cigarettes seized, as well as production equipment and raw materials. It was verified that over 2 million counterfeit e-cigarettes had been produced and sold, with the total amount involved exceeding 100 million yuan.

The regulation of e-cigarettes is a new challenge facing the industry in recent years. The Zibo City Bureau stated that it will continue to deepen the joint operation mechanism of public security, procuratorate, and court to crack down on counterfeit products, improve the ability and level of investigating online cases, and severely crack down on all kinds of illegal activities related to e-cigarettes. With practical actions, efforts will be made to promote the transformation of the governance of the e-cigarette industry from disorder to order, and contribute to the high-quality development and modernization of the industry.