Bay Area CEO And Company Indicted For Import Wire Fraud Scheme
OAKLAND – A federal grand jury in Oakland has indicted David Tung and Concord Farms, Inc. for conspiracy to commit wire fraud and wire fraud, announced United States Attorney Melinda Haag and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Acting Special Agent in Charge Tatum King.
According to the indictment, Tung, then of Hillsborough, CA, through his operation of Concord Farms as the Chief Executive Officer, is alleged to have engaged in a scheme to defraud the United States out of duties owed on imported items, namely produce items such as gourmet mushrooms. Concord Farms claimed to be one of the largest importers and growers of gourmet mushrooms in the United States, with multiple business locations including operations in California and New York.
Duties are taxes assessed on the value of imported items. The duties accrue when the items arrive at a United States port of entry. According to the indictment, Tung carried out his scheme by creating fraudulent invoices that undervalued Concord Farms’ imports and then caused those fraudulent invoices to be transmitted to the U.S. Customs and Border Protection (CBP), who relied on the invoices in assessing the amount of import duties owed by the defendants. Tung and others used computer file templates and photocopy machines to create some of the fraudulent undervalued invoices that were transmitted to CBP. Through the scheme, Tung and Concord Farms were able to avoid the full payment of duties actually owed on the imported items.
Tung made his initial appearance today in Oakland. Tung was released on a bond in the amount of $250,000. Tung’s next scheduled appearance is at 9:30 a.m. on March 6, 2015 before the Honorable Jon S. Tigar, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Tung faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution for the alleged violation of 18 U.S.C. § 1349 (conspiracy to commit wire fraud) and for each alleged violation of 18 U.S.C. § 1343 (wire fraud). Concord Farms faces a fine of $500,000 and five years of probation for each alleged violation. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan and Noble Hughes. The prosecution is the result of an investigation by the Department of Homeland Security, Homeland Security Investigations.