A Los Angeles Fashion District clothing wholesaler and two executives are headed for sentencing, facing consequences for significant financial crimes.
At a Glance
- CTJ and two executives are guilty of customs duty evasion and money laundering.
- The schemes included undervaluing imports, concealing drug money.
- The investigation was part of Operation Fashion Police targeting money laundering.
- The prosecution involved multiple federal agencies.
Targeting Money Laundering in Los Angeles
Los Angeles Fashion District wholesaler, C’est Toi Jeans, Inc. (CTJ), and two top executives were found guilty of money laundering and of evading over $8 million in customs duties. They employed schemes such as undervaluing goods by more than $62 million, leading to $10.2 million in unpaid tariffs. These crimes are tied to broader operations by federal authorities targeting financial crimes in the region.
The case forms part of Operation Fashion Police, an OCDETF investigation, focusing on dismantling money-laundering activities. More specifically, this involved complex tactics, including substantial cash payments and fraudulent invoices to U.S. Customs, circumventing millions in duties and taxes. Federal prosecutors charged the owner and his son for their roles in these evasions.
The Broader Network of Financial Crimes
This conviction illuminates deep-seated issues in the Fashion District, a pivotal place in Southern California for the Sinaloa Cartel’s operations. The ‘Black Market Peso Exchange’ allowed the cartel to effortlessly channel narcotic proceeds through legitimate businesses, thereby masking illegal activities.
“Money laundering is the lifeblood of large-scale drug trafficking, and it is therefore essential that we go after businesses and individuals that feed criminal organizations the money they crave,” United States Attorney Martin Estrada said.
Operation Fortune Runner played a crucial role in unearthing a sophisticated network of money brokers facilitating multi-million dollar laundering undertakings. Activities under scrutiny included smuggling operations leveraging undervalued invoices, denied declarations, and large, unreported cash inflows.
Legal and Financial Implications Ahead
The intricate fraud schemes run by Los Angeles-based entities like Platini Jeans, Ambiance Apparel, and others defrauded the U.S. government of substantial revenue. These operations bypassed necessary customs duties using undervaluation mechanisms, damaging legitimate revenue collection.
The investigation involved efforts from multiple agencies, including IRS Criminal Investigation and Homeland Security Investigations. These bodies are committed to securing American borders and tax systems against those leveraging loopholes for profit. CTJ and its executives now face significant legal repercussions as justice takes its course in rectifying these financial violations.
Sources
- L.A. Fashion District Wholesaler and Two of Its Executives Found Guilty of Money Laundering and Avoiding Tariffs and Taxes
- Los Angeles Clothing Company Failed to Pay $8 Million in Customs Duties
- L.A. Fashion Wholesaler and Executives Convicted of Money Laundering and Tax Evasion
