The U.S. Department of Justice (DOJ) on Monday unsealed a federal indictment against a Chinese company and three Chinese nationals for the alleged illegal importation of pill-making equipment and counterfeit die molds federal authorities say are capable of producing millions of potentially lethal fake pharmaceutical pills.
According to the 21-count indictment, CapsulCN International Co. Ltd. (CapsulCN) and Xiochuan “Ricky” Pan, 40, Tingyan “Monica” Yang, 37, and Xi “Inna” Chen, 30, all citizens of the People’s Republic of China, were charged with smuggling, money laundering and other offenses under the Controlled Substances Act for CapsulCN’s alleged criminal importation scheme.
The indictment alleges that CapsulCN unlawfully imported and distributed pill tableting machines (commonly referred to as pill presses), encapsulating machines, and counterfeit pill die molds.
According to the DOJ, many of the fake pills containing fentanyl and other controlled substances seized in the U.S. are manufactured using such pill-making equipment obtained from Chinese pharmaceutical equipment companies and imported into the U.S.
The fake pills are manufactured to mimic legitimate pharmaceutical drugs, but may be laced with fentanyl and methamphetamine. In many cases, they have been known to have deadly effects on those who take them.
CapsulCN allegedly concealed the equipment’s purpose using deceptive packaging, false manifests, and disassembled shipments to evade U.S. customs and DEA reporting requirements.
The indictment further alleges that from December 2011 to April 2025, Pan, CapsulCN’s principal officer, led the company in marketing and selling pill-making equipment to U.S. customers through websites, e-commerce platforms, and social media. Pan is charged under the indictment with leading a criminal enterprise.
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CapsulCN employees, including Yang and Chen, communicated with U.S. customers via encrypted messaging to facilitate smuggling and provided assembly instructions through social media videos. The company also maintained bank accounts in China and online payment services to transfer funds from the U.S., according to the DOJ.
Four CapsulCN-related internet domains were seized by federal authorities on Monday.
“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 on Monday.
“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,” Leachman said. “Our federal prosecutors, through collaborative efforts with our law enforcement partners, are determined to stop them.”
