The fashion industry is experiencing a period of decline.C’est Toi Jeans Inc. and its executives face stiff penalties. They were convicted of evading more than $8 million in customs duties. The company laundered more than $17 million in suspected narcotics proceeds. This case is only one aspect of a larger issue in the Los Angeles fashion industry.
Fashion District Fraud Exposed
In a shocking turn of events, C’est Toi Jeans Inc. (CTJ), a well-known Los Angeles Fashion District clothing wholesaler, and two of its executives were found guilty of orchestrating a massive scheme to evade customs duties and launder millions in drug money. The case has caused ripples in the fashion industry, highlighting the dark undercurrents that can exist beneath seemingly legitimate businesses.
The defendants, Si Oh Rhew, CTJ’s president and 75% owner, and Lance Rhew, a CTJ corporate officer, were found guilty of numerous charges, including conspiracy, failure to report large currency transactions, falsely classifying goods, making false statements, and international promotional money laundering. Their illegal activities are staggering, with over $8 million in evaded customs duties and more than $17 million laundered from suspected drug sales.
L.A. Fashion District wholesaler and two of Its executives found guilty of money laundering and avoiding tariffs and taxes https://t.co/8553lKcSrk
— US Attorney L.A. (@USAO_LosAngeles) October 30, 2024
Operation Fashion Police Unravels Criminal Network
This case stems from a larger 2014 operation known as “Operation Fashion Police,” which targeted money laundering activities in Los Angeles’ Fashion District. The Organized Crime Drug Enforcement Task Force (OCDETF) led the operation, which resulted in the seizure of more than $38.3 million in cash, exposing the scope of criminal activity hidden within the bustling fashion industry.
“Money laundering is the lifeblood of large-scale drug trafficking, and it is therefore essential that we go after businesses and individuals that feed criminal organizations the money they crave” – United States Attorney Martin Estrada
The investigation involved several agencies, including Homeland Security Investigations, IRS-Criminal Investigation, and US Customs and Border Protection, demonstrating the collaborative effort required to combat such complex criminal enterprises.
Los Angeles Clothing Company Failed to Pay $8 Million in Customs Dutieshttps://t.co/CWDZZaMlOh
— cindy horswell (@chorswell) November 1, 2024
Schemes and Deceptions
The defendants’ schemes were multifaceted and meticulously planned. They undervalued imported goods to avoid paying customs duties and received large cash payments from narcotics proceeds without filing the necessary reports. These actions not only defrauded the United States government, but also allowed illicit drug money to flow through the legitimate fashion industry.
Adding to their list of crimes, Si Oh Rhew and Lance Rhew were found guilty of aiding in filing false tax returns, omitting over $17 million in gross sales. This deliberate misreporting of income further underscores the extent of their fraudulent activities and their attempts to conceal ill-gotten gains from the IRS.
Consequences and Sentencing
The repercussions for C’est Toi Jeans and its executives are severe. Sentencing is set for January 21, with the Rhews potentially facing decades in prison. The company itself could face fines of up to $100 million, a devastating blow that should serve as a warning to other businesses tempted by illegal activities.
This case demonstrates the government’s commitment to combating financial crimes and money laundering in the business sector. It also emphasizes the importance of increased vigilance and oversight in industries that could be vulnerable to such criminal activity..
Sources:
- LA Fashion District Store, Execs Found Guilty in Money Laundering
- LA Clothing Importer, Executives Convicted in $8.4M Customs Fraud Scheme
