On Friday, it was announced that two men from California had been arrested on charges stemming from a scheme to avoid the payment of federal excise taxes on duty-free cigarettes that should have been sent abroad. Instead, the cigarettes were sent to local retail outlets. 54-year-old Yong “David” Lu of Arcadia and 54-year-old Wenzhu Guo of Monterey Park were arrested by federal authorities on Thursday morning.
The defendants are both Chinese nationals. They were named in a one-count indictment returned by a federal grand jury on Wednesday. Both men are charged with conspiring to defraud the United States. Lu is allegedly responsible for the diversion of duty-free cigarettes, while Gou is accused of acting as the primary distributor of the untaxed cigarettes.
Both men have entered pleas of not guilty. They were ordered free on bond and are set to stand trial on April 10. Further details regarding the case have been made available here.