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06/12/2013

Federal jury convicts Los Angeles businessman and his firm for role in major customs fraud scheme

SAN DIEGO — A Los Angeles-area businessman and his corporation were convicted by a federal jury Friday for conspiring to evade customs duties on more than $30 million in Chinese-made jeans, skirts, shorts and other apparel fraudulently imported to the United States.

Sunil Jiwat Mirwani, 39, and his corporation, M Trade Inc. are scheduled to be sentenced Sept. 9 in federal court. After deliberating for less than a day, the jury found Mirwani and M Trade Inc. guilty on all four felony counts contained in the original case indictment, including conspiring to defraud the U.S.; importing goods by means of false statements (two counts); and conspiring to launder money. The charges carry a maximum sentence of up to 29 years in prison and $1 million dollars in criminal fines.

Mirwani and M Trade Inc. were charged in July 2012 along with nine other defendants, including the then president of the San Diego Broker's Association, as part of a larger conspiracy involving fraudulently imported foreign-made textiles, cigarettes, snack foods and produce that was found to be infected with salmonella. The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service (IRS), the Food and Drug Administration (FDA), and prosecuted by the U.S. Attorney's Office for the Southern District of California.

According to evidence presented during the trial, Mirwani conspired with the other defendants to hire a group of San Diego-based businessmen and logistics professionals to import commercial quantities of foreign-made goods to the Port of Long Beach without paying customs duties. Before the goods entered the United States, Mirwani and his co-conspirators generated false paperwork and database entries to classify the goods as "in bond" – meaning they would not enter the commerce of the United States, but instead were marked for transshipment through U.S territory to Mexico. Mirwani and his co-conspirators also used forged perforation marks on the shipments.

Rather than complete the transshipment to Mexico, however, Mirwani and his co-conspirators hired truck drivers to haul the shipments to Mirwani's warehouses in the Los Angeles area. Having imported this merchandise duty-free, Mirwani would sell his apparel in the United States at an advantage over law-abiding competitors – including American manufacturers of similar goods and foreign manufacturers who paid the applicable customs duties on their imports.

In conjunction with the conspiracy, Mirwani transmitted millions of dollars via international wire transfers to hide the illicit proceeds and to help fund future fraudulent shipments. The wire transfers included nearly $10 million transferred from M Trade Inc.'s bank accounts to the bank account of Mirvana International, a company in Hong Kong that Mirwani co-owns with his twin brother. He also transmitted similar amounts of money to the Mirvana International bank account through other intermediary accounts in the United States and Mexico, and through M Trade Inc.'s account directly to mainland China.