Global Knowledge®

Three international trade companies, the President of the San Diego Customs Brokers Association, and seven others face federal charges after investigators uncovered a multi-million dollar import fraud scheme in Southern California.

Looking to evade taxes, customs duties and other charges, the fraud ring illegally imported over $100 million of goods, according to the Department of Justice. The group allegedly exploited the in-bond import process, which allows goods intended for sale in other countries to pass through American ports duty-free. San Diego Customs Brokers Association President, Gerardo Chavez, created fake documents claiming that the imports were destined for Mexico. He also created false database entries to back up the paperwork.

After claiming the goods as en-route to Mexico, the group got truck drivers to take the goods to warehouses all over Southern California. From there, the goods (including clothing from China and cigarettes produced in India) were shipped all over the U.S.

“The charges announced…underscores our commitment to ensure that no one exploits the import process for personal gain,” said Laura E. Duffy, U.S. Attorney for the Southern District of California. “Not only does such illegal conduct present a significant danger to the American people, but it deprives law abiding companies of a level playing field resulting in the potential loss of billions of dollars in revenue.”

The Department of Justice approximates that the scheme may have deprived California of over $10 million in customs duties, taxes and other revenue. Even more disconcerting is the claim that some vegetable shipments handled by the group were contaminated with salmonella.

Two of Chavez’s companies, Tecate Logistics LLC and International Trade Consultants LLC, were implicated in the scheme, as well as British citizen Sunil Mirwani and his company M Trade Inc. Additionally, several employees and agents of wholesalers, customs brokers and transport companies have been charged with knowingly aiding the conspiracy.

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Join Amber Road and American Shipper on Wednesday, June 20 at 2pm EDT for a webinar that will discuss findings from the second annual Import Operations & Compliance Benchmark Study, published by American Shipper and BPE Global. Key topics will include:

• Regulatory compliance policies and practices
• Import operations management and outsourcing
• Supporting technologies solutions and functionality
• Organizational structures and policies
• Training and education

Panelists for The Secrets to Import Success: Best Practices in Managing Import Operations & Compliance include:

• Nathan Pieri, SVP, Marketing and Product Development, Amber Road
• Andrea Appell, Director, BPE Global

Click here to register.

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President Obama recently signed an executive order, establishing the Interagency Trade Enforcement Center (ITEC) within the U.S. Trade Representative (USTR).  The Obama administration is aimed at doubling exports by the year 2015, and this new agency will help facilitate that goal.
 
According to Ron Kirk, Ambassador of USTR, the ITEC is among the most significant commitment of resources and expertise since the establishment of the USTR. The purpose of the Interagency Trade Enforcement Center will be to coordinate U.S. trade rights under international agreements, monitor unfair trade practices, as well as identify and eliminate foreign trade barriers. These tasks will hopefully curb the production of counterfeit and unsafe goods and improve market access for U.S. exporters. The ITEC will also strengthen trade enforcement of intellectual property laws.
 
Chairman of the House Trade Working Group, Rep. Mike Michaud (D-Maine), said, “Signing this order brings us one more important step closer to the level of trade enforcement we need to counter the predatory practices of countries like China.”
 
Based on the signed executive order, the mission and function of The Interagency Trade Enforcement Center will be to:
 
(a) serve as the primary forum within the Federal Government for USTR and other agencies to coordinate enforcement of U.S. trade rights under international trade agreements and enforcement of domestic trade laws;
 
(b) coordinate among USTR, other agencies with trade related responsibilities, and the U.S. Intelligence Community the exchange of information related to potential violations of international trade agreements by our foreign trade partners; and
 
(c) conduct outreach to U.S. workers, businesses, and other interested persons to foster greater participation in the identification and reduction or elimination of foreign trade barriers and unfair foreign trade practices.
 

Join the Association of Corporate Counsel and Management Dynamics for a complimentary webinar, Using Technology to Enhance Your Regulatory Compliance Program, on Wednesday, September 21 at 2:00pm EDT.
 
Global trade compliance experts will discuss key strategies to consider when creating or enhancing a compliance program, including:

• Understanding international trade sanctions, including Specially Designated Nationals
• Best practices for implementing an Export Compliance Program (ECP), including complying with new I-29 deemed export certification requirements
• The importance of screening against federal government debarred lists, including Medicare/Medicaid, FDA, FAR, etc., as well as Anti-Money Laundering (AML) and FCPA compliance

Speakers will include:

• Robert Roach, Chief Compliance Officer, New York University
• Anthony Hardenburgh, VP Global Trade Content, Management Dynamics

This is a must attend event for in-house counsel and regulatory compliance professionals.  Register for the webinar today!
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