Three companies accused of dodging customs fees by sneaking goods into U.S

Reuters News
Posted: Jul 26, 2012 12:24 AM
Three companies accused of dodging customs fees by sneaking goods into U.S

SAN DIEGO (Reuters) - Prosecutors have charged three California companies with seeking to avoid paying $10 million in customs fees by bringing containers of food and other items to port and claiming they were destined for other countries, then selling the goods in the United States.

The criminal complaint unsealed by federal prosecutors in San Diego on Wednesday named eight people, including the president of the San Diego Customs Brokers Association, who are accused of being part of the scheme.

Goods in over 90 fraudulently processed container shipments included clothing from China, cigarettes from India and Germany and packages of the Mexican cactus dish nopalitos, officials with the U.S. Attorney's Office said.

It amounted to at least $100 million in products and $10 million in lost customs duties, they said.

Because the goods were reported as simply passing through the Long Beach Port on their way to other countries, they were exempt from U.S. customs fees, prosecutors said.

The charges were brought against International Trade Consultants LLC and Tecate Logistics, which are based in Tecate, California, about 35 miles east of San Diego and immediately north of the Mexican border. The third company, M Trade Inc, is based in Los Angeles.

Among the eight people charged -- including the owners or operators of the companies -- some lived in southern California and some were in Tijuana, Mexico.

One of the accused, Gerardo Chavez, is president of the San Diego Customs Brokers Association and the owner of Tecate Logistics and International Trade Consultants, prosecutors said.

Calls to M Trade and International Trade Consultants were not answered, and an employee at Tecate Logistics declined to comment. The defendants will have their first court appearance on Thursday in federal court in San Diego.

Messages left for the Customs Brokers Association late on Wednesday evening were not immediately returned.

All the defendants were charged with conspiracy to defraud the United States, which carries a maximum penalty of five years in prison if convicted.

Some of the defendants were also accused of bringing in goods by means of false statements and obstruction of justice.

(Reporting by Marty Graham; Editing by Alex Dobuzinskis and Stacey Joyce)