|Peter Quinter, Esq.|
According to the press release by the U.S. Department of Justice, the customs broker and his employees conspired with various individuals and companies to enter merchandise into the United States "in bond" to avoid paying customs duties, then forged official U.S. Customs and Border Protection (CBP) stamps to attempt to establish that the shipments were transported into Mexico. In reality, the shipments never left the United States, but were distributed to various customers throughout California. The imported merchandise was worth over $100 million, and the unpaid duties on the imported cigarettes, apparel, and food products was about $10 million.
Criminal Complaint Case No. 3:12-mj-02756-KSC alleged violations of 18 U.S.C. 371 (conspiracy to defraud the United States), which provides for a maximum penalty of 5 years in prison and a $250,000 fine; 18 U.S.C. 542 (entry of goods by means of false statements to CBP) which provides for a maximum penalty of 2 years in prison and a $250,000 fine; and 18 U.S.C. 1519 (obstruction of justice) which provides for a maximum penalty of 20 years in prison and a $250,000 fine per count. The case was investigated by CBP, U.S. Immigration and Customs Enforcement (ICE), and the Office of Criminal Investigations of the U.S. Food and Drug Administration (FDA).
Procedurally, the Criminal Complaint was filed, under seal, on July 23, 2012. Arrest warrants were issued that day. Mr. Chavez and others were arrested on July 26, 2012, and have made their initial appearance before Magistrate Judge Crawford. Some of the individuals charged with crimes remain at large as fugitives.
This shocking case is of great interest to those of us in the logistics business, any owner of a customs broker business, any employee of a customs broker, and anyone who handles in-bond merchandise. I will continue to report regularly on developments in this case. I also remind readers that a Criminal Complaint is merely an allegation.
Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson law firm.