By Emma Rumney, Kaylee Kang and Tom Polansek
LONDON/NEW YORK/CHICAGO (Reuters) -From an office a 15-minute drive from Chicago’s O’Hare International Airport, one small firm helped import millions of unauthorized Chinese-made vapes last year alone, forming a key link in the supply chain feeding U.S. demand for illegal e-cigarettes.
In a little over four years, the firm, a customs brokerage run by a man named Jay Kim, became a go-to broker for the Chinese vape industry. The firm worked on 60% of all shipments of vapes and vape parts from China to the U.S. in 2024 registered by the Food and Drug Administration, according to a Reuters analysis.
“A lot of them have FDA authorization,” Kim said in an interview in his office in April, referring to the vape shipments his firm handled.
However, FDA data on imports into the U.S. of FDA-regulated goods such as tobacco products or medicines showed the products Kim’s firm helped bring into the United States included unauthorized brands like Lost Mary and Geek Bar.
The FDA has declared those brands illegal to import or sell, warning their array of fruit and candy flavors may appeal to children. The agency says nicotine can harm developing brains, and impact attention, learning and mood in young people, who can get hooked more easily on the addictive chemical.
A Lost Mary spokesperson said it had no connection or contact with Kim’s firm, and flavors play a key role in helping adult users quit smoking. The maker of Geek Bar did not respond to a request for comment.
The Chinese city of Shenzhen is the biggest source of vapes, both legal and illegal, coming into the United States. In 2024, China exported more than 26 billion yuan ($3.6 billion) in vapes to the U.S., according to Chinese customs data. But U.S. customs figures show only $333 million in Chinese vapes were officially received in the U.S. that same year.
Mismatches in custom data between the U.S. and its trading partners are not uncommon, but a 90% gap was unusual, two customs data specialists told Reuters.
Unauthorized vapes often arrive in the U.S. disguised as other items like shoes and toys, according to the FDA, which leads efforts to control the vape market.
Reuters used FDA and U.S. customs data, interviews with vape and tobacco industry insiders, and information from U.S. regulators and law enforcement to build a picture of how unauthorized vapes make their way onto U.S. shelves.
It found a group of middlemen based on U.S. soil – including some customs brokers and distributors – who played key roles in the vape supply chain, and sometimes take steps to avoid detection.
Trump Administration officials have promised a crackdown; FDA Commissioner Marty Makary has said the agency will stop illegal imports and distribution.
“Our borders have been far too porous when it comes to challenges like illegal e-cigarette products coming from other countries,” an FDA spokesperson said, adding that the agency is planning to use artificial intelligence to “stem the flow of products that are appealing to our nation’s children.”
In May, the FDA and Customs and Border Protection announced a $34 million seizure of unauthorized vapes in Chicago. Officials found many of the shipments in the seizure, which took place in February, contained vague product descriptions and incorrect values.
As part of the operation, for the first time, the agency sent letters to 24 middlemen involved in the vape supply chain, including U.S. importers and customs brokers.
The letters warned the middlemen it was a crime to make false statements to the government, and asked them to explain how they ensured they followed tobacco laws, according to the FDA.
Reuters was not able to establish whether Kim was among the customs brokers who received a letter from the FDA. He did not respond to detailed questions about Reuters’ findings.
VAPE MIDDLEMEN
Customs brokers do not buy or sell goods themselves. Rather, they are paid by others, usually the importer, to help navigate the customs process by submitting documents and fielding enquiries from border officials, according to Lenny Feldman, a managing partner at the law firm Sandler, Travis & Rosenberg.
Customs brokers may be breaking the law if they are found to have not conducted proper due diligence, said Feldman.
Speaking briefly to Reuters at his office in April, Kim said his firm did not deal with vape shipments anymore after exiting the business last year.
He said that a former employee of his firm had gotten him into working with vape clients and took those customers with her when she left.
However, the FDA data reviewed by Reuters showed that vape-related shipments handled by Kim have continued throughout 2025, including in June.
The FDA, which was directed to fire 3,500 employees in March, works with CBP to catch unauthorized vape shipments at the border.
A spokesperson for CBP told Reuters the agency seized over 3 million units of illegal vapes valued at $76 million in 2024. “CBP has encountered bad actors exploiting shipments to transit illicit goods, including illegal vapes, synthetic opioids, precursor chemicals and related paraphernalia,” the spokesperson said.
The FDA said that over the past two years, efforts by FDA and CBP had led to the seizure of around 7.1 million e-cigarettes with an estimated retail value of over $136 million.
Secretary of Health and Human Services Robert F. Kennedy Jr. said the administration would “wipe out” fruity and sweet flavored vapes from China that appeal to kids. “We are going to get rid of all of them,” he told the Senate Committee on Health, Education, Labor and Pensions in May.
Illinois Congressman Raja Krishnamoorthi said middlemen like Kim bear some responsibility for the flood of vapes, but lays most of the blame with the FDA, which he accuses of sitting idle while illegal vapes flood into the country.
“The FDA is a disaster. It’s asleep at the switch,” he said. “You have illicit vapes all over the place.”
IN PLAIN SIGHT
The Trump Administration’s tariffs on China, as well as vape seizures, have already dented supply, Reuters reported this month. Vape shipments recorded by the FDA collapsed in May, with a shortage of popular brand Geek Bar in particular.
The FDA has authorized 34 different vape products made by companies like British American Tobacco and Altria, but no fruity or sweet flavored vapes that the FDA says could appeal to children.
And yet executives at BAT estimate unauthorized devices make up 70% of vape sales in the U.S., valuing their sales at $8.14 billion last year.
The supply chain ferrying illegal Chinese-made vapes into the U.S. mostly operates in plain sight.
It starts with a network of exporters based in China. After a vape shipment clears customs in the U.S., it is passed along to its U.S. buyer – usually a distributor, which then sells them to smaller wholesalers and retailers nationwide.
The FDA collects data on U.S.-based recipients of vape shipments. The largest in 2024 was Reynolds American, the U.S. subsidiary of BAT.
But the top ten largest U.S. vape recipients also included six obscure firms, opened in 2023 or 2024 and sometimes operating out of residential homes.
The second-largest recipient of vape shipments in 2024 was a Chicago-based company called Somo Trade LLC, established in 2023, Reuters analysis of FDA data and state business filings show.
A woman at the business’ address, a residential home on Chicago’s north side, told a Reuters reporter that the property was not involved in the vape business.
Another recipient of vapes, Rongda Trade, is registered to a house on the same street as Somo Trade, opened the same month, and has already been shut down, its filings show. No one answered the door when Reuters visited the address.
No one answered at a residential address linked to Lila Trade on Chicago’s southwest side, either. The name of the registered agent, Xiaohong Dai, was not among those listed on four mailboxes out front.
Reuters could not find websites for any of the firms, and their state business filings did not contain any contact information.
Meanwhile, in February, New York Attorney General Letitia James sued 13 different companies which she said were major U.S. vape distributors, accusing them of working closely with Chinese manufacturers to fuel the unauthorized vape industry.
“Together, Defendants have established an industry for flavored e-cigarettes, particularly disposable vapes, and staked out their own lucrative shares in the soaring market,” the complaint states. “All have engaged in reprehensible, illegal conduct and aim to addict youth to their products.”
Mitch Zeller, former head of the FDA’s Center for Tobacco Products during the Obama, Trump and Biden administrations, placed the blame on U.S.-based distributors, such as those named in James’ lawsuit, for feeding demand.
“There’s only a handful of middlemen, middle companies, that are responsible for taking the illegal, imported stuff being misclassified and mislabeled and getting it into interstate commerce,” he said.
($1 = 7.1836 Chinese yuan renminbi)
($1 = 0.7374 pounds)
(Reporting by Emma Rumney in London, Kaylee Kang in New York and Tom Polansek in Chicago; Editing by Michael Learmonth)
Comments