The U.S. Justice Department released the information below:
A federal grand jury returned a 21-count indictment against a
Chinese company and three Chinese nationals for their alleged role in the
illegal importation of pill-making equipment, the Department of Justice
announced.
According to an indictment returned April 23 and unsealed today,
CapsulCN International Co. Ltd. (CapsulCN) and Xiochuan “Ricky” Pan, 40,
Tingyan “Monica” Yang, 37, and Xi “Inna” Chen, 30, all of the People’s Republic
of China, were charged with smuggling, Controlled Substances Act, and money
laundering offenses in connection with CapsulCN’s unlawful import and
distribution of tableting machines (also known as “pill presses”),
encapsulating machines, and counterfeit die molds capable of producing millions
of potentially lethal fake pills. The indictment also charges Pan, CapsulCN’s
principal officer and a shareholder, with leading a continuing criminal
enterprise. Additionally, four internet domains used by CapsulCN to market and
sell illicit pill-making equipment to U.S. customers were seized today in
connection with this investigation.
“This indictment and today’s domain seizures send an
unmistakable message to criminals in the People’s Republic of China and across
the world — the Department will use every weapon in its arsenal to combat those
who facilitate the manufacture and distribution of deadly drugs in the United
States,” said Deputy Attorney General Todd Blanche.
“This U.S. Attorney’s Office is focused on bringing the full
force of justice to anyone who conspires to poison our communities with
fentanyl,” said Acting U.S. Attorney Margaret Leachman for the Western District
of Texas. “Whether through the importation of pill presses and related
materials, as alleged in this indictment, or through trafficking precursor
chemicals and the drug itself, it is evident that bad actors are determined to
harm Americans with fentanyl. Our federal prosecutors, through collaborative
efforts with our law enforcement partners, are determined to stop them.”
“These
indictments against Chinese nationals exemplify Homeland Security
Investigations’ unwavering commitment to breaking every link of the global
fentanyl supply chain,” said Special Agent in Charge Jason T. Stevens of the
HSI El Paso Division. “We are committed to continue working hand-in-hand with
our domestic and international law enforcement partners to get deadly fentanyl
out of our communities and put an end to the chaos and devastation resulting
from this epidemic.”
Many of the fake pills containing fentanyl and other controlled
substances seized in the United States are manufactured using relatively
inexpensive pill-making equipment — such as pill presses, encapsulating
machines, and die molds — obtained from Chinese pharmaceutical equipment
companies and imported into the United States. These fake pills often mimic the
look, feel, and effect of legitimate pharmaceutical drugs and are particularly
dangerous and misleading to U.S. consumers, who may falsely believe they are
taking legitimate prescription medication that is safer and less addictive than
the fentanyl and methamphetamine the pills really contain.
According to court documents, between December 2011 and April
2025, Pan led CapsulCN, which advertised and sold pill-making equipment to U.S.
customers on websites, popular e-commerce platforms, and various social media
accounts. CapsulCN marketed and catered to customers seeking to make
counterfeit pills that mimicked the look and effect of prescription drugs. In
2020, Pan and Yang created a new brand, “PillMolds,” to advertise, sell, and
promote counterfeit die molds to the United States. Although the PillMolds
brand was part of CapsulCN, thereafter, CapsulCN ceased marketing and selling
die molds via its www.capsulcn.com website and instead did so using the website
www.pillmold.com. Today, HSI seized both of these websites, along with two
others (www.ipharmachine.com and huadapharma.com) that CapsulCN used to
facilitate its unlawful sales and imports of pill-making equipment.
The indictment alleges that, between December 2011 and April
2025, CapsulCN imported and distributed pill presses and encapsulating machines
to customers in the United States, knowing or having reason to believe that
those items would be used to manufacture controlled substances. CapsulCN also
distributed counterfeit die molds, which can be used to compress inactive and
active ingredients into pills that mimic the shape and imprinted markings of
legitimate pharmaceutical drugs such as oxycodone, dextroamphetamine,
hydrocodone, amphetamine, and alprazolam. Drug traffickers often replace these
active ingredients in the legitimate pharmaceutical drugs with other controlled
substances such as fentanyl and methamphetamine.
The indictment alleges that CapsulCN concealed the nature and
purpose of the pill presses, encapsulating machines, and die molds from U.S.
customs officials and law enforcement by using deceptive packaging and false
manifests that undervalued and misidentified the contents. Some customers
sought to avoid mandatory requirements to report the import and distribution of
pill presses and encapsulating machines to the U.S. Drug Enforcement
Administration (DEA). CapsulCN also allegedly helped conceal the nature of its
shipments avoid detection by disassembling the machines and shipping the parts
in separate packages, again with false manifests. CapsulCN employees then would
direct customers to social media accounts maintained by CapsulCN that contained
videos instructing customers on how to reassemble the machines once in the
United States.
According to court documents, Yang, Chen, and other CapsulCN
sales representatives communicated extensively with potential customers in the
United States over company emails and encrypted electronic messaging
applications. In these communications with customers, Yang, Chen, and others
agreed to smuggle pill-making equipment to U.S. customers and assisted
customers in selecting die molds that best replicated identified pharmaceutical
drugs. Yang, Chen, and other CapsulCN sales representatives also exchanged electronic
messages and emails negotiating payment for CapsulCN products that were
smuggled into the United States and imported and distributed for use in
manufacturing controlled substances. CapsulCN maintained bank accounts in the
People’s Republic of China and accounts with online payment services to
facilitate the transfer of funds from the United States to China in furtherance
of CapsulCN’s criminal activities.
The HSI El Paso Field Office investigated the case with
assistance from Customs and Border Protection, IRS Criminal Investigation’s El
Paso Office, and the U.S. Postal Inspection Service.
Trial Attorneys Colin W. Trundle, Cadesby Cooper, Kaitlin Sahni,
Edward E. Emokpae, Scott B. Dahlquist, Assistant Director Katharine A. Wagner,
Deputy Director of Criminal Litigation A.J. Nardozzi, and Director Amanda
Liskamm of the Department of Justice’s Consumer Protection Branch, and
Assistant U.S. Attorneys Laura Gregory and Donna Miller and OCDETF Chief Steven
Spitzer of the U.S. Attorney’s Office for the Western District of Texas are
handling the case.
This effort is part of an Organized Crime Drug Enforcement Task
Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the
highest-level criminal organizations that threaten the United States, using a
prosecutor-led, intelligence-driven, multi-agency approach. Additional
information about the OCDETF Program can be found at www.justice.gov/OCDETF.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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