Clothing Importers Indicted Over Undervaluation Scheme
A California clothing importer and its owners were indicted over schemes to undervalue apparel and evade customs duties, the U.S. Attorney’s Office for the Central District of California said in a Dec. 10 news release. The importer, C'est Toi Jeans (CTJ), and owner Si Oh Rhew, of La Canada Flintridge, and his son, Lance Rhew, of Los Angeles, a CTJ corporate officer who owns another company that did business with CTJ, were the subjects of a 35-count indictment from a federal grand jury, the Department of Justice said. The charges include “conspiracy; entry of goods falsely classified; entry of goods by means of false statements; passing false and fraudulent papers through customhouse.”
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The undervaluation scheme is said to involve the purchase of the goods from overseas manufacturers, including in China. CTJ would understate the value of the imports, which would reduce the duties owed, DOJ said. Company records included an “internal guidance document entitled 'CEST TOI OFFICE.docx,' which instructed its employees to modify invoices from manufacturers that were submitted to defendant C’EST TOI JEANS’ customs brokers by replacing the true negotiated unit prices with false lower prices for each type of garment,” according to the indictment.
In total, “the indictment alleges that the defendants sent 515 individual wire transfers totaling $137,156,726 to pay overseas suppliers for undervalued garments,” it said. “Overall, according to the indictment, CTJ imported goods that were undervalued by more than $62 million, causing approximately $10,269,068 in unpaid tariffs and duties that should have been paid to CBP.” The USAO also alleged that CTJ was used “to receive large amounts of bulk United States currency, including from narcotics proceeds, as payment for outstanding merchandise orders from customers in Mexico and elsewhere.”
Email ITTNews@warren-news.com for a copy of the indictment.