Eight people, including
the president of the San Diego Customs Brokers Association, have been arrested on
charges of running a $100 million fraud ring through the Port of Long Beach.
The eight individuals, as
well as three trade companies, have been accused of scheming to import goods, much
of it Chinese-made clothing and cigarettes from India, by falsely claiming the goods
would not enter US commerce and were meant for trans-shipment to destinations in
Mexico or other countries, according to the US Attorney’s Office.
And in making the false
claims, the defendants were able to avoid more than $10 million in taxes and Customs
duties, according to prosecutors, and therefore undercut the competition by selling
their goods cheaper.
The imports included more
than 90 shipments of Chinese-made clothing, prosecutors said, as well as tobacco
and snack food.
The complaint, which was
unsealed July 25, names San Diego Customs Brokers Association president Gerardo
Chavez, 42, as the lead defendant in the case, saying that he used his employees
to generate falsified paperwork to help orchestrate the scheme.
The defendants hired truck
drivers to haul the shipments to warehouses and storage areas throughout Southern
California, and then bring the goods back to the L.A. area for shipment throughout
the US, according to prosecutors.
The 56-count indictment
includes three counts of bringing in goods by means of false statements, 52 counts
of obstruction of justice and one count of conspiracy to defraud the United States.
The seven other people charged
are all agents and employees of customs brokers. Each resides within San Diego County
or Tijuana, except one person, whose home address is listed as Los Angeles.
The three companies implicated
in the scheme are Tecate, California-based International Trade Consultants and Tecate
Logistics LLC, as well as Los Angeles-based M Trade Inc.
