California Clothing Importer, 2 Executives Sentenced for Avoiding Customs Duties
A Los Angeles-based wholesale clothing importer and two of its executives were sentenced on Sept. 29 for avoiding payment of over $8 million in customs duties on imported clothing and money laundering, the U.S. Attorney's Office for the Central District of California announced.
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The company, C'Est Toi Jeans, was sentenced to five years of probation and ordered to submit to federal monitoring. The company, which imported apparel from China and other nations and exported goods to buyers in Mexico, Central America and South America, also was ordered to pay an $11.5 million fine and over $15 million in restitution.
Si Oh Rhew, C'Est Toi Jeans' president, was sentenced to 103 months in prison, fined $8 million and ordered to pay over $19 million in restitution. Lance Rhew, Si Oh Rhew's son and a corporate officer of the company, was sentenced to 84 months in prison, fined $500,000 and ordered to pay restitution, the U.S. Attorney's Office said.
C'Est Toi Jeans and the Rhews avoided paying customs duties and tariffs by buying garments from foreign manufacturers, then submitting false information to CBP undervaluing the apparel imports. DOJ alleged that the company undervalued its goods by over $51 million, causing around $8.4 million in unpaid duties.
The U.S. Attorney's Office said all three defendants were found guilty by a jury after a six-week trial of "three counts of entry of falsely classified goods, three counts of entry of goods by means of false statements, three counts of passing false and fraudulent papers through a customhouse, and two counts of international promotional money laundering." The defendants were also found guilty on various charges related to a money laundering scheme involving proceeds from drug trafficking.