LOS ANGELES - The owner of a Los Angeles-area trucking company pleaded guilty in federal court here this morning to a federal charge stemming from his role in a massive apparel smuggling plot that U.S. Immigration and Customs Enforcement (ICE) investigators describe as the largest commercial fraud scheme ever uncovered on the West Coast.
Armando Salcedo, 45, owner of Friends Global Logistics trucking company, admitted in court today that he used the Customs in-bond transportation system to illegally bring Chinese-made wearing apparel into the United States without paying the required duty, in violation of bilateral trade agreements and import quotas.
Specifically, Salcedo pleaded guilty to conspiring to make false declarations and to smuggle. The charge stems from an investigation by ICE that led to the issuance of a 34-count indictment in September 2007. According to the indictment, beginning on an unknown date and ending in 2002, Salcedo and others sent ocean and air shipments of clothing from China to the United States and provided documents to Customs brokers that falsely stated the garments were being sold to companies in Mexico. In fact, using one or more of his companies, Salcedo received the shipments of apparel here in the United States and oversaw their delivery to buyers throughout the country. Among the buyers were several major U.S.-based clothing distributors, including Kenko Warehouse and Hampshire Designers.
ICE's investigation revealed that the far-reaching smuggling scheme resulted in more than 7,000 shipping containers of apparel being illegally imported into the United States. The indictment charged Salcedo with being personally involved in the smuggling of approximately 3,200 containers. Customs documents associated with those containers claimed that the value of goods in those containers was approximately $267 million, but the government believes that the true value of goods was much higher.
During the probe, U.S. Customs and Border Protection officers intercepted illegally imported clothing worth approximately $67 million. That apparel, as well as approximately $25 million in cash, has been seized by ICE in conjunction with the investigation. The seized clothing and most of the cash has been forfeited to the government.
Kevin W. Weeks, CBP director of Field Operations, Los Angeles, said: "This is a significant example of yet another attempt to evade U.S. textile trade laws. CBP will continue to vigorously inspect quota-visa importations to protect America's economy."
As part of his guilty plea, Salcedo has agreed to forfeit nearly $5 million in personal property and other assets. Those assets include $1.6 million from the sale of a warehouse belonging to Salcedo's trucking company that was used to facilitate the smuggling scheme, as well as his Downey, Calif., residence, which has been appraised at approximately $2 million. In addition, Salcedo has agreed to give the government nearly $1.2 million in cash seized from a pair bank accounts.
"Commercial smuggling is a multi-billion dollar global industry that robs governments of vital revenues and undermines our economy," said Robert Schoch, special agent in charge of the ICE office of investigations in Los Angeles. "Even more disturbing, the huge profits generated by these illicit activities are often funneled back into other types of criminal enterprises."
Salcedo faces a statutory maximum sentence of five years in federal prison when he is sentenced on May 12. The investigation into Salcedo's co-conspirators is ongoing.