HSI Los Angeles investigation ends with clothing wholesaler fined for customs fraud and violating US drug trafficking sanctions
Company with ties to the Sinaloa Cartel ordered to pay nearly $10.4 million
LOS ANGELES — A Southern California-based clothing wholesale company was fined $4 million, ordered to pay $6,390,781 in restitution, and placed on probation for five years Dec. 8 for undervaluing imported garments in a scheme to avoid paying millions in customs duties and for doing business with a woman linked to Mexico's Sinaloa drug cartel.
Homeland Security Investigations (HSI) Los Angeles Special Agent in Charge Eddy Wang and U.S. Attorney for the Central District of California Martin Estrada made the announcement.
"This case involves bad actors defrauding U.S. taxpayers out of millions of dollars in import duties while additionally showing complete disregard for laws prohibiting American businesses from engaging in economic activities with specially designated narcotics traffickers," said HSI Los Angeles Assistant Special Agent in Charge Jennifer Reyes. "The complexity of the case and subsequent prosecution are a perfect example of how critical the work of the El Camino Real Financial Crimes Taskforce is to the Southern California economy and rooting out nefarious businesses that threaten legitimate trade."
Ghacham Inc., based in Paramount and doing business under the brand name Platini, was given financial penalties and ordered to create and maintain an anti-money laundering compliance and ethics program with a third-party monitor review, who will report to the court annually.
The company pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse and one count of conspiracy to engage in any transaction or dealing in properties of a specially designated narcotics trafficker under a statute known as the Foreign Narcotics Kingpin Designation Act. This is the first criminal conviction in this district under the Kingpin Act.
Mohamed Daoud Ghacham, 39, of Bell, is a Ghacham Inc. executive who pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse. He is expected to be sentenced in the coming months.
According to court documents, Ghacham Inc. imported clothing from China and submitted fraudulent invoices to U.S. Customs and Border Protection that undervalued the shipments, allowing the company to avoid paying the full amounts of tariffs owed on the imports.
At Mohamed Ghacham's direction, Chinese suppliers prepared two invoices for clothing ordered by Ghacham Inc. — a true invoice, which reflected the actual price paid for the goods, and a fraudulent customs invoice, which reflected an understated price. Ghacham Inc. submitted the customs invoices to U.S. Customs and Border Protection and customs brokers to fraudulently reduce the tariffs owed on the imports while maintaining the true invoices in its accounting records.
From July 2011 and February 2021, Ghacham Inc. and Mohamed Ghacham undervalued imported garments by more than $32 million and failed to pay approximately $6,390,792 in customs duties.
Ghacham Inc. also illegally conducted business with Maria Tiburcia Cazarez Perez in violation of the Kingpin Act, which prohibits people and businesses in the United States from doing business with specially designated narcotics traffickers. Cazarez Perez was previously listed as a specially designated narcotics trafficker under the Kingpin Act for her involvement in the financial network of Ismael "El Mayo" Zambada Garcia and Victor Emilio Cazares Salazar, two leaders of the Mexico-based Sinaloa Cartel. Cazares Salazar was sentenced to 15 years in federal prison for drug trafficking activities in federal cases out of San Diego and New York City.
"The company flouted the Kingpin Act, doing business with member of a money laundering network used by … two of the world's most notorious drug traffickers," prosecutors argued in a sentencing memorandum. "It cheated taxpayers out of millions, both to save itself money and to secure an unfair edge against its competition in the Southern California garment market. And it did so through a sustained, extensive effort over the course of more than a decade."
HSI and U.S. Customs and Border Protection investigated this matter. The U.S. Department of Commerce’s Office of Export Enforcement, the Treasury Department's Office of Foreign Assets Control, and IRS Criminal Investigation provided significant assistance.
U.S. District Judge Maame Ewusi-Mensah Frimpong presided over the case and Assistant U.S. Attorney Alexander B. Schwab of the Corporate and Securities Fraud Strike Force prosecuted the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multiagency approach.
HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce of more than 8,700 employees consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’ largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.
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