Update: Details about the role of Joel Elder, another defendant, have been added, as have the names of the companies and businesses of both Arcadia men in the indictment.
Two Arcadia residents in their 40s are included in a group of nine people facing federal charges for allegedly trying to avoid import taxes by smuggling almost 200 shipments of Chinese-made apparel into the United States, according to a release from the U.S. Office of Immigration and Customs Enforcement.
Taylor "David" Wong, 49, of Arcadia and 41-year-old Tsu "Nick" Wei Lin, also of Arcadia, are named in a pair of July 21 federal indictments that detail a scheme that involved more than $12 million in apparel and $2 million to $4 million in lost government tax money. The indictments come from the result of a two-year operation that combined the efforts of ICE and the Department of Homeland Security.
According to ICE, Wong operated various business fronts, while Lin received illegal shipments. Wong's businesses were Trendy Angela and Jeans Colony Corp., while Lin operated under the business name of ENL Global Inc., among others.
Both men were supposedly the beneficiaries of an Industry-based Foreign Trade Zone, or FTZ, under the watch of owner Wei "Julia" Lai, 39. The indictment says Lai charged importers like Wong and Lin roughly $5,000 to devalue and "move" Chinese-made goods through her trade zone. The more she saved, the indictment indicates, the higher the fee.
Lai would also "prepare Industry FTZ invoices for importers ... that charged purported 'warehouse services' for diverted China shipments and included false and fraudulent duty amounts," which where noted in another scheme to mis-label what goods were actually being moved. For example, the indictment reads, a shipment of higher-taxed denim pants would instead be classified as woven pants, which commands a much lighter duty fee.
The "mis-classification" was one of several methods used to elude Customs and Border Protection, the governing body that handles any fees, duties or assessments of anything imported into the country. Another defendant, Joel Elder, was allegedly responsible for the electronic filing of the entry documents for the Chinese-made apparel. According to the indictment, Elder did this under the business guise of ITC-Diligence.
Elder would also assign numbers to various Chinese shipments to show the goods were on the move, according to the indictment. But, he would also file transportation entries to Customs and Border Protection to show that the goods were coming to the Free Trade Zone -- when in reality, they'd never get there.
According to ICE, seven of the nine defendants--including the Arcadia pair--appeared in federal court earlier this month and are free on bond. Authorities are still looking for two others. Some of the other defendants are from Long Beach, Walnut, Diamond Bar and Alhambra.
The defendants' charges also include:
- money laundering and wire fraud violations
- entry of goods by means of false statements
- relanding of goods
- making false statements
- aiding and abetting
The penalties for these violations, according to ICE, range from a maximum term of two years in prison for the counts involving the entry of goods by false statements to up to 20 years in prison for each of the smuggling allegations. The investigation is ongoing.