United States Attorney Benjamin B. Wagner
Eastern District of California
Online Clothing Business Owners Arrested for Customs Fraud, Money Laundering
|FOR IMMEDIATE RELEASE||
Tuesday, February 5, 2013
Docket #: 1:13-cr-00036-LJO-SKO
FRESNO, Calif. – Hoang Minh Nguyen, 32, Dung Hang Dao, 32, and Nga Thien Nguyen, 37, all of San Jose, have been arrested today and charged with conspiracy to defraud the United States of customs duties, mail fraud, structuring of cash transactions and money laundering, United States Attorney Benjamin B. Wagner announced. On January 31, 2013, a federal grand jury returned a 23-count indictment, which was unsealed today following the defendants’ arrest.
According to court documents, between November 2008 and January 2013, Hoang Minh Nguyen and Dung Hanh Dao owned and operated several companies based in Patterson and San Jose that imported clothing and merchandise from China. According to the indictment, when the companies would receive orders from customers, Hoang Minh Nguyen and Dung Hanh Dao would place orders with suppliers in China and have the goods sent directly to the United States. However, Hoang Minh Nguyen and Dung Hanh Dao would declare the goods as samples, even though they intended to sell the goods to customers at retail value, in violation of U.S. customs regulations. In selling clothing and merchandise declared as samples, Hoang Minh Nguyen and Dung Hanh Dao defrauded the United States of customs duties owed on those imports. It is alleged that the companies have collected more than $3 million in sales from customers located throughout the United States.
With the proceeds from their business, Hoang Minh Nguyen and Dung Hanh Dao sent significant amounts of cash to China via Western Union money transfers. They broke up the cash deposits to Western Union agents into amounts of $10,000 or less in an attempt to prevent Western Union from filing Currency Transaction Reports on those transactions. The indictment also alleges that Nga Thien Nguyen, accompanied by her brother, Hoang Minh Nguyen, opened a bank account with Citibank on January 5, 2012. Nga Thien Nguyen allowed her brother access to the account so that he could deposit more than $215,000 in cash into the bank account. It is alleged that Hoang Minh Nguyen broke up the cash deposits into amounts of $10,000 or less in an attempt to prevent the bank from filing Currency Transaction Reports on those transactions, in violation of the Bank Secrecy Act.
“Commercial smuggling schemes like this not only rob the government of vital revenues, they also undermine the economy and penalize businesses that follow the rules,” said Mike Prado, resident agent in charge of HSI Fresno. “We will not allow unscrupulous importers who break the law to get rich at America’s expense.”
IRS Special Agent-in-Charge Jose M. Martinez stated: “IRS-Criminal Investigation (IRS-CI) is committed to unraveling complex financial transactions involving structuring and money laundering schemes where individuals attempt to conceal the true sources of their money. Structuring financial transactions to avoid currency reporting requirements is a criminal violation of federal law under the Bank Secrecy Act. Deliberately avoiding BSA requirements is a form of money laundering that will be vigorously investigated by IRS-CI, which is a part of the Central California Financial Crimes Task Force, headed by the USAO in the Eastern District of California – Fresno Division, along with HSI, and other federally deputized task force officers from local and state agencies, working together to combat these types of violations on a fulltime basis.”
This case is the product of an extensive investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service – Criminal Investigation and the Central California Financial Crimes Task Force. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty for conspiracy to defraud the United States of five years in prison and a $250,000 fine. The maximum statutory penalty for mail fraud is 20 years in prison and a $500,000 fine; for structuring, it is 10 years and a $500,000 fine; and for money laundering, it is 20 years in prison and a $500,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.