The capture of a Chinese ship packed with illegal immigrants was part of an elaborate American undercover operation, The Royal Gazette can exclusively reveal.

And as a result of the operation three people have appeared in court in New York charged with smuggling.

Hui Lin, 34, Yiu Ming Kwan, 45, and Nai Fook Li, 30, all of New York, have been charged with conspiracy to commit alien smuggling and attempted alien smuggling.

All three were arrested following the boarding by Marines and US Coast Guard officers last week of the Xing Da -- which was part of a scheme to carry illegal Chinese immigrants to America.

It was meant to rendezvous at a pre-arranged place in the mid-Atlantic and transfer its "cargo'' to a smaller ship which would take the passengers to America.

Li was on the smaller boat -- with undercover US agents -- and when he panicked because the rendezvous was not made he was arrested.

Immigration and Naturalisation Service district director Charles Cobb said: "I am extremely proud of the role our agents played in this significant operation.

"This was a long, sensitive and complex undercover investigation. The INS is totally committed to the fight against alien smuggling and apprehending those who traffic in human lives.'' Yesterday the US Attorney's office in Massachusetts released a court affidavit which detailed the operation.

According to the affidavit the three defendants had been dealing with a man they thought was the owner of a vessel who was willing to off-load illegal aliens from a larger ship and transport them to Massachusetts.

"Unbeknownst to the defendants, the owner of the contact vessel was actually an undercover special agent of the INS,'' it said.

According to the affidavit the defendants met several times with the undercover agent to work out details for off-loading the illegal aliens.

"Ultimately the defendants agreed to pay the undercover agent a minimum of $500,000 to smuggle the illegal aliens into the United States,'' says the affidavit.

It says that on Saturday, September 28, Li left with undercover agents to rendezvous with a larger ship at a pre-arranged location in the Atlantic Ocean.

On October 2 -- last Wednesday -- the US Coast Guard found and boarded a cargo ship, the Xing Da near the rendezvous spot, about 140 miles west of Bermuda.

"After boarding the ship, the Coast Guard received a radio transmission from the contact vessel indicating that Li was getting nervous because he was unable to contact the larger ship and that he wanted to contact his `boss'. Li was at that time placed under arrest,'' says the affidavit.

Following Li's arrest Lin and Kwan were arrested in New York City. They appeared in court last Friday. Li had an initial appearance in Boston on Monday. They are all being held in custody and if convicted could be jailed for up to 15 years.

Yesterday Rear Admiral John L. Linnon, Commander of the First Coast Guard district said the joint effort worked very well despite extremely arduous conditions.

"We are very happy to work with the INS and the US Attorney's office on this important case.'' US Attorney Donald K. Stern said: "This long-term and sensitive investigation has thus far resulted in the indictment of three persons.

"This was a real team effort. We intend to aggressively pursue this on-going investigation.'' Last night the Xing Da was anchored about a mile off Ferry Reach and was being guarded by US Coast Guard cutters Reliance and Thetis . She was boarded last week -- with the authority of the People's Republic of China -- after the captain requested US Coast Guard help.

The ship had lost power and was drifting in heavy seas and it had to be towed to Bermuda.

On board yesterday were Marines in full combat gear. The 83 passengers and 26 crew were being held below decks.

She was towed into Bermuda waters by the Reliance surrounded by four Bermuda Police boats and the Government tug Powerful .

The sides of the Canton-registered cargo ship, which set sail last June, were covered in rust.

None of the passengers or crew are being allowed to leave the ship and arrangements are being made by the US authorities to fly them to either the Bahamas, the US base in Cuba, or Wake Island in the Pacific.

There they will be put through a processing centre and probably repatriated to China. Those on board suspected of being involved in criminal activities could be prosecuted.

One hundred men from the Bermuda Regiment's A Company have been embodied to help guard the passengers.

The Regiment was not deployed yesterday and it is not known exactly when the passengers and crew will be moved from the ship.

The Bermuda Government has asked they be taken away from the Island as quicky as possible and want to see US planes flown to Bermuda.

Home Affairs Minister Quinton Edness said: "We are anxious about how long they will be in Bermuda. Either they will be flown off or provided with a ship to take them away.

"It is an American show. We have provided the humanitarian services that are required and if more are required we will provide them.'' US Consul General Robert Farmer, who saw passengers in the Xing Da 's hold yesterday, said he had been in extensive talks with his Government throughout the day.

"We are working very hard with the Government of Bermuda to resolve this. We appreciate the humanitarian aid that Bermuda has given us.'' He said he hoped to move the Chinese by the end of the week.