WASHINGTON — U.S. authorities have turned up alleged customs fraud involving the illegal importation of footwear, detailed in two indictments that were handed down late last week.
In the first case, officials from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations accused the owner of an El Paso, Tex.-based footwear operation and two of his employees of running a $100 million trade-based money laundering scheme involving footwear “smuggling” into Mexico.
The second case charged a Sacramento, Calif., businessman with evading millions of dollars in customs duties on imported shoes from China.
ICE officials and local law enforcement arrested Jose Luis Rodriguez, 52, the owner of Erene Inc. in El Paso, and two other employees for the alleged money laundering scheme. A 61-count federal indictment was unsealed on Thursday in El Paso, bringing multiple money laundering conspiracy charges against the accused.
Erene, doing business as J&E Sports, Rise High Skateshop, Quicken, Quicken Footwear and Accessories, Pepes Casual, Arise 915 and Forward Footwear, primarily sells shoes and other goods to customers in the U.S. and Mexico, according to ICE. The indictment alleges that dating back to May 2007, Rodriguez made false and material representations to shoe suppliers that Erene would only sell their products at retail prices to end-use consumers. Confiscated merchandise included authentic footwear bearing Converse, Nike and Puma labels, an ICE spokeswoman said.
Federal and state law enforcement also seized about $600,000 from four bank accounts affiliated with Erene and Rodriguez and about 25,000 pairs of shoes with an estimated domestic value of $1.1 million.
In the other, separate case, a 27-count indictment was unsealed in Sacramento against Thomas Romeo, 51, accusing him of orchestrating an elaborate fraud scheme to avoid paying millions of dollars in duties on imported Chinese-made footwear. According to the indictment, Romeo’s company, Romeo & Juliette Inc., imported Chinese-made footwear and distributed it under the brand names Bearpaw and Attix. The indictment alleges that from 1994 through 2011, Romeo instructed employees and others to create false invoices substantially undervaluing the imported footwear, sometimes at 50 percent of the actual value.
Romeo had his employees submit the false invoices to customs for purposes of calculating the duties and fees Romeo & Juliette owed. Over the course of the scheme, Romeo allegedly avoided paying $5.6 million in customs duties.