23/04/2025
A small shoe shop in central Napier was at the centre of a major illegal tobacco smuggling operation and a $645,000 fraud.
Four Chinese nationals have been convicted and sentenced for their roles in the operation which ran from 2020 to 2024.
The operation was discovered by a Customs investigation into the smuggling of cigarettes and tobacco through international mail. Officers discovered huge numbers of cigarettes and a large amount of loose tobacco destined for residential and commercial addresses in Gisborne and Napier.
Between October 2023 and January 2024 Customs officers examined 132 airmail consignments from China at the International Mail Centre based in Mangere, Auckland, and seized 230,600 cigarettes and 110,075 kilograms of loose tobacco.
More than half the packages were destined for the ‘Size Shoes’ shop on Dickens Street in Napier. The rest were going to another address in Napier and various addresses in Gisborne.
The packages contained undeclared cigarettes and tobacco placed amongst household items and clothing. The loose tobacco was concealed within tea packets and placed alongside boxes containing “Nike” sport shoes and addressed to Size Shoes.
The shop is owned by Jielong Liu, also known as Jay, a 36-year-old Chinese national with New Zealand Permanent Residency.
Liu also works at a restaurant called ‘Asian Food House’ in Gisborne with his close friend Jiepeng Liu, also known as Leo, a 31-year-old Chinese national on a 3-year work visa who first arrived in New Zealand in 2023.
The Asian Food House is owned and operated by Jiepeng Liu’s parents Canbin Liu, 62, and Xueling Cao, 60.
Analysis of the Jielong Liu’s electronic devices revealed that a further 139 packages were imported between 2020 and 2024.
The total in unpaid customs duty and GST for all the illegal imports was $645,832.19
In February last year Police were informed that the Asian Food House restaurant was selling cigarettes over the counter.
The following month Customs officers observed on several occasions restaurant staff hand small brown bags to customers in return for $20 cash. The staff were later identified as being Jiepeng Liu and Xueling Cao.
The officers also observed multiple people walk up to the restaurant entrance and gesture through the window making a cigarette smoking action with their hands.
When officers searched the restaurant and other addresses related to the four offenders they found more than $110,000 in cash, and thousands of cigarettes and bags of loose tobacco.
Analysis of CCTV footage from the restaurant showed the four offenders, plus three unidentified staff members, selling cigarettes and loose tobacco to customers over the front counter on 539 occasions.
Analysis of Jielong Liu’s mobile phone identified conversations with a Chinese freight forwarding company discussing the importation of shoes and cigarettes into New Zealand and techniques to avoid detection from security inspection machines.
Jielong Liu and Jiepeng Liu were charged with defrauding customs revenue and importing prohibited goods. They were also charged alongside Canbin Liu and Xueling Cao with possessing and selling uncustomed goods.
All four pleaded guilty and were sentenced in Gisborne District Court on Tuesday.
Jielong Liu was sentenced to eight-and-a-half months home detention and Jiepeng Liu to seven months home detention.
Canbin Liu and Xueling Cao were fined $10,400.