Broker Convicted for Scheme to Divert Medical Devices Meant for Export to US Customers
A Miami-based customs broker was recently convicted of wire fraud and conspiracy for his part in a scheme to lie to manufacturers to obtain deeply discounted medical devices intended for export, then divert those devices to customers in the United States. Luis Soto, president of Absolute Freight Services, was convicted after a jury trial where the Justice Department alleged Soto knew his actions as a forwarder contributed to the scheme.
According to a DOJ press release, Byramji Javat and other co-conspirators told manufacturers that they were buying medical devices to ship to U.S. troops in Afghanistan and as aid for the Afghan people. As a result, the manufacturers sold them the medical devices at discounted prices. But instead, Javat and his co-conspirators, including Soto, would divert the goods for sale to U.S. customers, typically hiding their activity by exporting the devices then immediately re-importing them or providing false shipping documentation.
Court documents say Soto argued that, as a customs broker and logistics provider, he had no knowledge of the scheme to defraud the manufacturers. But the government introduced as evidence emails from a simultaneous, unrelated scheme to divert other Food and Drug Administration-regulated goods in which Soto directed his colleagues to remove export labels and check packages for tracking devices.
In another email, Soto appeared to acknowledge that the unrelated client was lying to the supplier about the destination of the goods. Discussing the request to remove tracking devices, Soto told the client that: “Last time we did all this work and you had to export the goods because the supplier requested export documents, remember? Then you shipped it back to USA and I cleared it. We did all that work and it was very expensive. ... Please confirm if in fact you want us to do all this work?” DOJ said that exchange demonstrated “Soto’s complete awareness that his clients are/were lying to a supplier that expected its products to be exported.”
Other evidence introduced at trial showed that the co-conspirators “disregarded temperature requirements when transshipping over-the-counter pain medicines, one of the defendants kept a shipment of diabetic test strips that required refrigeration in his car trunk overnight and another shipment of medical products became covered in bird droppings,” DOJ said in its press release. The products involved “included surgical instruments, professional dental care devices, bandages, and aspirin.”
The jury convicted Soto of two counts of wire fraud related to his transmission to FDA of entry documentation, one count of conspiracy to commit wire fraud, one count of conspiracy to obtain pre-retail medical products worth $5,000 or more by fraud or deception, and two counts of obtaining pre-retail medical products by fraud or deception. Three of his co-defendants, including Javat, recently pleaded guilty. Another is awaiting trial. Soto and the other defendants have yet to be sentenced.
Email ITTNews@warren-news.com for copies of the court documents.