San Diego CHB Association President Sentenced to Three Years in Prison for Duty Evasion

The Southern California U.S. District Court sentenced on July 1 former customs broker Gerardo Chavez to 37 months imprisonment, according to a press release issued by U.S. Attorney Laura Duffy. The 42-year-old former head of the San Diego Customs Brokers Association pleaded guilty in November 2012 to charges of conspiracy to evade at least $18 million in duties.

Court documents said Chavez imported shipments of commercial goods, such as Chinese-made apparel and Indian-made cigarettes, to the Port of Long Beach where he and co-conspirators falsely declared the goods destined for a third country, such as Mexico. After bypassing the duty payments, Chavez oversaw the goods being transported to several southern California warehouses, according to the documents. The $18 million in tariff evasion came from $100 million of fraudulently imported products. Chavez and others were charged last year (see 12072626).

“Gerardo Chavez abused the trust this country instilled in him, endangering public health and stealing from the United States treasury at a time when we could ill afford it—all for his personal, fraudulent gain,” said Duffy. By using Chavez’s direction and customs broker license, co-conspirators also smuggled salmonella-infected Mexican food products into the U.S., she said.

The judge directed Chavez to forfeit the Tecate, Calif., property that housed his International Trade Consultants corporate offices, according to the U.S. Attorney’s office. ICE's Homeland Security Investigations did a four-month wiretap investigation that revealed extensive customs fraud between 2007 and 2012, it said.