UPDATE 1-Over Two Dozen Arrested in $325 Million Counterfeit Smuggling Ring

(adds drug ring, smuggling details, byline and dateline)

By Gianna Palmer

NEWARK, N.J., March 2 (Reuters) - More than two dozen people from the United States and China were charged on Friday with running a $325 million counterfeit goods ring through a New Jersey port, one of the largest knock-off smuggling busts in history, authorities said.

Simultaneous stings by two federal agencies at Port Newark-Elizabeth Marine Terminal in Elizabeth, New Jersey, also uncovered a related scheme to smuggle crystal methamphetamine into the U.S. from Taiwan.

"It's huge," said New Jersey U.S. Attorney Paul Fishman at a press conference, standing beside photographs of mountains of boxes of the seized bogus goods.

"It's one of the largest counterfeit goods cases ever investigated in this district and one of the largest ever prosecuted in the country," Fishman said.

More than two years of undercover investigations by the FBI and U.S. Immigration and Customs Enforcement (ICE) resulted in the indictment of 29 people, including 22 who were arrested in the U.S., one picked up in the Philippines and six still at large.

Knock-offs of hot consumer items including Nike sneakers, Lacoste shirts and Louis Vuitton handbags were packed into shipping containers imported from China through Elizabeth, the busiest port on the East Coast.

The brand-name insignias were concealed during shipment through various methods and, once the goods arrived in the U.S. and were moved to a warehouse, were "processed" to reveal the logos. In one case, authorities said, fake Ugg boots were shipped with an unmarked sole that was then removed in the warehouse to reveal a sole beneath it that read "Ugg."

From the warehouse, the goods were distributed to New York, New Jersey and elsewhere throughout the country, authorities said.

The scheme depended on fraudulent documents ranging from bogus shipping paperwork to fake Social Security cards used by the smugglers.

"The counterfeit goods were manufactured in China and smuggled into the United States through containers falsely associated with legitimate importers," authorities said in a press release.

Federal authorities said arrests were made in New Jersey, Texas, New York and the Philippines.

"The cost of counterfeiting is incredibly high -- in the billions and billions of dollars lost to legitimate companies," Fishman said. (Writing By Ellen Wulfhorst and Barbara Goldberg; Editing by Dan Burns)