DOJ Indicts Chinese Company, 3 Individuals for Allegedly Smuggling Pill-Making Equipment

A Justice Department official said the government ‘will use every weapon in its arsenal’ to prevent the manufacturing and distribution of deadly drugs.

Signage is seen at the Department of Justice headquarters in Washington on Aug. 29, 2020. Andrew Kelly/Reuters

Three Chinese nationals and a China-based company have been charged with 21 counts for allegedly importing pill presses and other equipment used for making “lethal fake pills” into the United States, the Department of Justice (DOJ) announced on May 12.

Pan Xiaochuan, Yang Tingyan, and Chen Xi were indicted on charges of smuggling drugs and money laundering over their alleged roles in CapsulCN International Co.’s importation of pill-making equipment into the United States. The indictment was returned last month but was only unsealed on Monday.

Federal prosecutors stated that between December 2011 and April 2025, CapsulCN imported pill-making equipment to the United States using deceptive packaging and false shipping details to avoid detection by customs.

“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,” Deputy Attorney General Todd Blanche said in a statement.

In the indictment, prosecutors said that CapsulCN was aware that drug traffickers could use the equipment to make fake pills laced with controlled substances such as fentanyl and methamphetamine.

The company used multiple websites, social media sites, and e-commerce platforms to advertise its business to customers seeking to make counterfeit pills that mimicked prescription drugs.

Pan acted as CapsulCN’s principal officer and shareholder, overseeing the company’s operations and staff recruitment, according to the indictment. The other two defendants, Yang and Chen, worked as sales representatives for CapsulCN.

Between January 2017 and December 2022, CapsulCN allegedly shipped more than 21,000 packages to the United States, with 265 of them being intercepted and seized by U.S. customs, prosecutors said.

According to the indictment, the company allegedly received about $6.8 million through a U.S. payment service from the sale of pharmaceutical equipment and ingredients.

The defendants have not been assigned legal counsel as of press time.

The Trump administration has been working to curb the flow of fentanyl—a powerful synthetic opioid that can be fatal even when taken in small amounts—and its precursor chemicals into the United States.

In February, President Donald Trump signed an executive order suspending the duty-free exemption for low-valued shipments from China as part of efforts to combat fentanyl trafficking.

Trump stated in his order that numerous China-based companies “go to great lengths to evade law enforcement and hide illicit substances in the flow of legitimate commerce.”

To conceal the actual contents of their parcels and the identities of distributors, the companies employ reshippers in the United States, falsify invoices, and use deceptive packaging, according to the order.