U.S. Attorney Announces $3.64 Million Settlement Of Civil Fraud Lawsuit Against Menswear Company And Its Manager For Underpaying Customs Duties Owed On Apparel Imported Into The United States
Luchiano Visconti and Its Manager Admit That Company Significantly Underreported the Value of Menswear Imported to the United States and Routinely Underpaid Customs Duties
Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director, CBP Field Operations New York, announced today that the United States has filed and settled a civil lawsuit against Luchiano Visconti Loutie LLC d/b/a Luchiano Visconti (“LUCHIANO VISCONTI”), a New York-based company that imports and sells men’s apparel to retailers, as well as its manager, SASHA HOURIZADEH (“HOURIZADEH”). The settlement resolves claims that LUCHIANO VISCONTI and HOURIZADEH (collectively, “Defendants”) defrauded the United States by falsely underreporting to CBP the value of apparel imported from overseas in order to avoid paying customs duties owed on the goods.
U.S. Attorney Damian Williams said: “Luchiano Visconti and Hourizadeh engaged in a fraudulent scheme to cheat the Government of customs duties owed by falsely reporting the value of the apparel brought into this country. This Office is committed to combatting customs fraud and will continue to hold companies, as well as their executives, accountable when they mispresent the value of imported goods to evade paying legally required duties.”
Executive Assistant Commissioner AnnMarie Highsmith said: “Trade enforcement is a priority for CBP, and this settlement serves as a great example of collaborative efforts to enforce trade laws. The dedication of the men and women of the CBP Office of Trade, the Office of Chief Counsel, and the United States Attorney’s Office to protect a fair and competitive trade environment is vital to facilitating lawful trade.”
Under the settlement agreement approved by U.S. District Judge P. Kevin Castel, Defendants will pay $3,641,157 to the United States. As part of the settlement agreement, Defendants also made admissions regarding their conduct. LUCHIANO VISCONTI and HOURIZADEH admitted that LUCHIANO VISCONTI significantly underreported the actual value of imported menswear on entry documents filed with CBP and routinely underpaid customs duties on the menswear. Specifically, Defendants admitted that they regularly provided their customs brokers with information and documentation, including commercial invoices, that significantly understated the true value of the imported menswear and the price actually paid for the apparel. LUCHIANO VISCONTI and HOURIZADEH also admitted that, in some instances, they made changes to invoices provided by a foreign manufacturer before providing them to a customs broker. In other instances, as acknowledged by Defendants, foreign manufacturers transmitted invoices that LUCHIANO VISCONTI and HOURIZADEH knew or had reason to know did not reflect the actual value and price paid for the menswear.
As alleged in the Complaint filed in Manhattan federal court:
From December 2013 through August 2019, LUCHIANO VISCONTI and HOURIZADEH defrauded the United States by materially underreporting to CBP the value of imported apparel. Defendants knowingly submitted, or caused the submission of, customs entry forms and associated invoices to CBP that contained false valuations of the apparel.
In some cases, HOURIZADEH altered commercial invoices issued by a foreign manufacturer so that the invoices reflected lower and false prices. In other instances, a foreign manufacturer transmitted two categories of invoices to LUCHIANO VISCONTI and HOURIZADEH that, together, reflected the actual price paid for the apparel. The first category of invoices identified specific quantities and prices for the imported apparel. These invoices, in sum, reflected a substantially lower price than what LUCHIANO VISCONTI actually paid for the imported goods. The second category of invoices were for services relating to the production of the Menswear, such as “pre-production” services, “patent” services, and “designer” services. In reality, and as reflected in LUCHIANO VISCONTI’s own banking records, these invoices generally reflected an additional amount paid by LUCHIANO VISCONTI for the same shipment of apparel. Defendants, however, routinely failed to provide their customs broker with this second category of invoices, which constituted a substantial portion of LUCHIANO VISCONTI’s payments for the apparel.
In the settlement agreement, LUCHIANO VISCONTI and HOURIZADEH admitted, acknowledged, and accepted responsibility for the following conduct:
- From December 2013 through August 2019, LUCHIANO VISCONTI imported menswear from manufacturers based outside the United States, including Turkey and China (the “Foreign Manufacturers”).
- HOURIZADEH is the LUCHIANO VISCONTI manager who is responsible for managing the importation of the menswear and all customs entry issues, including the provision of relevant and necessary information and documentation to LUCHIANO VISCONTI’s customs brokers who prepared and submitted the entry summaries to CBP.
- LUCHIANO VISCONTI’s customs brokers used commercial invoices and other information provided by LUCHIANO VISCONTI and HOURIZADEH to determine the value of the menswear to declare to CBP and to calculate the amount of the customs duties owed. LUCHIANO VISCONTI and HOURIZADEH knew that the customs brokers would rely on the information and invoices when preparing the entry summaries submitted to CBP.
- LUCHIANO VISCONTI and HOURIZADEH regularly provided LUCHIANO VISCONTI’s customs brokers with information and documentation, including commercial invoices, that significantly understated the true value of the imported menswear and the price actually paid by LUCHIANO VISCONTI to the Foreign Manufacturers for the menswear.
- LUCHIANO VISCONTI did not pay over $1.8 million in customs duties that it was obligated to pay on the menswear.
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In connection with the filing of the lawsuit and settlement, the Government joined a whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
Mr. Williams thanked U.S. Department of Homeland Security, Homeland Security Investigations, and CBP for their investigative efforts and ongoing support and assistance with the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Charles S. Jacob is in charge of the case.