Customs Broker Pleads Guilty to Declaring Goods Duty Free, Pocketing Actual Duties from Clients

A Texas customs broker pleaded guilty May 14 to entry of misclassified goods, smuggling, and making false statements, in connection with a scheme where he defrauded both CBP and his clients. According to court documents, Alejandro Santos of Laredo misidentified goods duty free, and then collected the full amount of duties actually owed to CBP from clients and pocketed the difference.

According to the plea agreement, on separate occasions Santos acted as customs broker on entries of goods that were of Italian and Indian origin, respectively. For the Italian-origin alkyd resins, Santos misclassified the goods as U.S. goods returned and duty free, despite knowing the goods were subject to duties. On importation of the polyester resin from India, Santos falsely declared that the goods were actually Mexican and duty free under NAFTA. In both cases, Santos collected the full amount of duties actually owed to CBP from his clients. Santos then kept the money for himself. Later, Santos told an ICE agent investigating the scheme that he did not collect the full amount of duties from his clients. The investigator knew otherwise.

The Court of International Trade had already ordered Santos to pay a $19,000 penalty in December for mostly unrelated violations of the customs regulations (see 12122603), including failing to notify the importer of record when doing business with an unlicensed person; conducting business without a valid power of attorney; misclassification of entries; and failure to exercise due diligence and responsible supervision and control. For the violations alleged in this Southern Texas U.S. District Court criminal case, Santos could face a maximum sentence of 20 years in federal prison as well as a $250,000 fine. Santos also agreed to forfeit his customs broker license, per the terms of the plea agreement.

Email ITTNews@warren-news.com for a copy of the plea agreement.