California Clothing Importer Fined $4 Million for Skirting Customs Duties
Ghacham Inc., a Paramount, California-based wholesale clothing company operating under the Platini brand, was ordered to pay a $4 million fine and nearly $6.4 million in restitution for undervaluing its garment imports to avoid paying millions of dollars in customs duties, the U.S. Attorney's Office for the Central District of California announced Dec. 8. The penalty, which also includes a five-year probationary period, was also levied for Ghacham's work with a woman tied to Mexico's Sinaloa drug cartel.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The probationary period stipulates that the firm must "create and maintain an anti-money laundering compliance and ethics program and submit to review by a third-party monitor," who will report annually to the U.S. District Court for the Central District of California.
Ghacham pleaded guilty in December 2022 to "one count of conspiracy to pass false and fraudulent papers through a customhouse" and one count of conspiracy to violate the Foreign Narcotics Kingpin Designation Act by conspiring to engage in a transaction with a specially designated narcotics trafficker. The U.S. attorney's office noted that the company's conviction marks the first of its kind in the California central district under the Kingpin Act. Company executive Mohamed Daoud Ghacham also pleaded guilty and will be similarly sentenced "in the coming months."
From July 2011 and February 2021, Ghacham imported textiles from China and submitted false invoices to CBP that undervalued the shipments by more than $32 million, DOJ said. The Chinese suppliers would prepare two invoices, one with the goods' actual price and one with the undervalued price.