U.S. Takes Action Against Alleged Apparel Smugglers
By ANDY FIXMER
Staff Reporter
In what could be the biggest apparel smuggling ring in over a decade, three local businesses have been cited by the U.S. Attorney’s office as having participated in a scheme to get $418 million worth of goods past customs.
In a complaint filed in U.S. District Court in Los Angeles and recently unsealed, federal prosecutors say that over a two-year period beginning in mid-2001, the ring illegally imported 5,000 containers of apparel through the ports of Los Angeles and Long Beach from Hong Kong.
In the process, the complaint charges, $63 million in tariffs were avoided, as well as import quotas on Chinese goods.
The operation was run out of the Hong Kong offices of Asian Charter Ltd., where the company provided oversight and financial backing to Panorama City-based Key Delta International, Vernon-based Friends Global Logistics Inc. and Rosemead-based New East Inc., according to the complaint.
Key Delta’s owner, David Kirby, arranged for the merchandise to bypass customs by filing false paperwork that disguised its true destination as Mexico, the lawsuit alleges. Goods bound for Mexico are allowed entry through U.S. ports and are not subject to quotas or tariffs.
Friend Global’s owner and manager, Armando Salcedo, allegedly used his trucking company to transport the containers from the port to an intermediate storage yard, where drivers substituted paperwork.
At times, the company removed high security seals used on international ocean-faring freight, replacing them with low-security domestic seals to disguise the nature of the shipment, the complaint alleges.
‘Merely allegations’
For freight headed to Mexico, seals must remain in tact from the time the containers enter the port until the cargo reaches its final destination. The seals are how customs officials in both countries ensure the containers haven’t been tampered with during shipping.
“Seals need to remain intact unless a government agency is authorized to unseal it or if it goes into a facility where it is legitimately (unloaded),” said Robert Krieger, president of Norman Krieger Inc., a licensed freight shipper and customs broker.
No response to the complaint has been filed in court.
Key Delta International and New East do not have published phone numbers or Web sites, and it is unknown whether the companies have retained legal representation.
Friend Global’s attorney, Elon Pollack, dismissed the charges against his client as “merely allegations.”
He said the government is naming all parties involved in any aspect of the operation. Friend Global didn’t know anything about the shipments they were transporting, he said.
“They knew they were picking up a container,” Pollack said. “They are a trucking business, where’s the crime in that?”
U.S. Customs Service officials based in Long Beach declined to talk about the suit because it entails “active” investigations, said Public Information Officer Mike Fleming.
In August 2001 a new division was created within customs to specifically combat textile smuggling. With 13 full-time inspectors, the Textile & Enforcement Division is the only customs division that focuses on a specific commodity.
Legislation enacted in the wake of the Sept. 11 terrorist attacks made all parties involved in the importation of goods liable for their contents. The law also sets in place a tracking system for containers headed to other foreign points of entry.
“A lot of hard work has gone into stopping (smuggling),” said Janet Lubuda, director of the textile enforcement division at the U.S. Customs. “It’s an illegal activity. There’s a lot of money involved and because of that there are always going to be people trying to circumvent the laws any way they can.”
Early on in the smuggling operation, according to the federal complaint, Camila Lee, owner of New East, received the ocean containers at several Los Angeles area warehouses and, at the instruction of Asian Charter, arranged distribution of the smuggled goods within the United States. By late 2002, the suit alleges that Lee primarily used two Carson warehouses, belonging to Keihin America Corp. and GTS Terminals. Neither was named in the suit.
Charges were first filed in November 2002, although the case was under seal until late May because of the “on-going” nature of the investigation, according to customs officials. Revealing the suit could have jeopardized the investigation, officials said.
Prosecutors wouldn’t say whether the companies and their owners faced anything more than the civil complaint.
“All I can say is that they haven’t been named in any criminal charges,” said Tom Mrozak, spokesman for the U.S. Attorneys office in Los Angeles. “At least they haven’t been named at this time.”
The civil complaint seeks permission to seize the already frozen bank accounts of all the companies involved in the operation. The accounts are spread between banks in Hong Kong, the United States and the Cayman Islands.
