Southland Man Charged in 'Largest Commercial Fraud' Scheme Uncovered on West Coast

LOS ANGELES, CA - The U.S. government and the Hong Kong Special Administrative Region will share $20.5 million in forfeited assets seized as part of a probe spearheaded by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HIS) into what is believed to be the largest commercial fraud scheme ever uncovered on the West Coast.

The action, announced by ICE on Tuesday, was the culmination of an investigation originally launched by the former U.S. Customs Service in 2000 into a multinational criminal organization responsible for smuggling hundreds of millions of dollars worth of Chinese-made wearing apparel into the U.S. through the ports of Los Angeles and Long Beach.

The ensuing probe by HIS special agents in Los Angeles and Hong Kong, working closely with U.S. Customs and Border Protection and Hong Kong's Customs and Excise Department, revealed the smuggling scheme resulted in more than 7,000 shipping containers of apparel, worth over $600 million, being illegally imported into the United States.

So far, five persons, including the owner of a Los Angeles-area trucking company, have been federally charged in connection with the case.

Armando Salcedo, 53, owner of Friends Global Logistics trucking company, pleaded guilty in 2008 to making false customs declarations and smuggling. In addition to receiving an 18-month prison term, Salcedo forfeited nearly $5 million in personal property and other assets to the federal government, including his Downey residence and the City of Commerce warehouse.

The remaining four defendants remain at large and are considered fugitives.

To avoid import duties and quotas, the organization's operatives-based in China, Hong Kong and the U.S. - provided documents to customs brokers falsely stating the Chinese-made garments were being sold to companies in Mexico when, in fact, they were being delivered to buyers throughout the U.S. Investigators estimate the loss of customs revenues alone at more than $60 million.

"This payout has been a long time coming, but it's a testament to the perseverance of the personnel on two continents who were involved in dismantling this scheme," said Joseph Macias, special agent in charge of HIS Los Angeles. "Commercial smuggling is a multi-billion dollar global industry that robs governments of vital revenues and undermines our economy," he added.

Besides the interdiction of more than 200 shipping containers of clothing, the probe also resulted in the seizure of a 100,000 square foot warehouse in the City of Commerce, as well other business and residential locations in Los Angeles and Laredo, Texas. Additionally, investigators seized or obtained restraining orders against two dozen bank accounts in the U.S. and Hong Kong.

"All attempts to circumvent U.S. importation revenues are taken very seriously," said Anne Maricich, acting director of CBP's Office of Field Operations in Los Angeles. "By collaborating and pooling resources transnationally with law enforcement partners in a massive undertaking such as this, our borders extend to further stop culprits and recover substantial monetary losses."

— City News Service, photo via Shutterstock