Audrey Strauss, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent in Charge of the New York Office of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), and Marty Raybon, Acting Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), announced the filing of criminal and civil charges against GEORGE ILOULIAN, a/k/a “George Illulian,” the CEO of an apparel company located in New York, New York. ILOULIAN was charged, in an indictment unsealed yesterday, with participating in a years-long scheme to defraud CBP by submitting invoices to CBP that falsely understated the true value of the goods his company imported into the United States, thereby evading the obligation to pay hundreds of thousands of dollars in customs duties.
ILOULIAN was arrested yesterday and presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court. The criminal case has been assigned to U.S. District Judge Paul G. Gardephe. In addition, a civil fraud lawsuit against ILOULIAN and his company, DELTA UNIFORMS, INC. (“DELTA”), which is also assigned to Judge Gardephe, was unsealed in Manhattan federal court earlier today. The civil complaint asserts that ILOULIAN and DELTA violated the False Claims Act by misrepresenting the true value and nature of the goods they imported into the United States on entry documents submitted to CBP. The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, George Iloulian cheated the United States out of hundreds of thousands of dollars by causing false documents that misrepresented the value of imported goods to be submitted to CBP to avoid paying lawfully owed customs duties. Iloulian now faces criminal charges for his alleged fraud, and the government’s civil suit seeks treble damages and penalties against Iloulian and his company.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “Iloulian allegedly evaded the obligation to pay hundreds of thousands of dollars in customs duties using a double-invoicing scheme, essentially creating two invoices, one for payment and one for customs. HSI New York and U.S. Customs and Border Protection will continue to partner in protecting U.S. trade from perpetrators who intentionally defraud the U.S. government for a profit.”
CBP Acting Director of New York Field Operations Marty Raybon said: “U.S. Customs and Border Protection is proud to have played an important role to this ongoing investigation that resulted in the takedown of an elaborate conspiracy to defraud the United States of hundreds of thousands of dollars in revenue. This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle nefarious enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.”
According to the allegations in the Government’s indictment and civil complaint[1]:
From at least in or about 2010 through at least in or about 2020, ILOULIAN, and others known and unknown, including individuals associated with overseas manufacturers, conspired to submit fraudulent invoices to CBP that understated the value of apparel imported into the United States, thereby depriving the United States of hundreds of thousands of dollars in customs duty revenue. ILOULIAN and his co-conspirators achieved lower customs duties on imported goods in two ways: (i) a “double-invoicing scheme,” and (ii) a “fabric-type scheme.”
To effect the double-invoicing scheme, which was perpetrated by ILOULIAN and his co-conspirators from at least in or about 2010 through at least in or about 2020, ILOULIAN utilized two invoices: One invoice, at times referred to by ILOULIAN and his co-conspirators as the “Actual Invoice” or the “For Payment” invoice, contained higher prices and reflected what DELTA actually paid overseas manufacturers for apparel. The second invoice, which they at times referred to as the “Customs Invoice” or “For Customs Declaration” invoice, contained false lower prices. The information in the Customs Invoice was submitted by DELTA, through a customs broker (the “Customs Broker”), to CBP. CBP relied on the information from the Customs Invoice in assessing and collecting customs duties from DELTA. Accordingly, by presenting the false Customs Invoices to CBP, DELTA was able to pay fraudulently lower customs duties than DELTA actually owed. In one version of the double-invoicing scheme, DELTA directed an overseas manufacturer to send to DELTA two sets of invoices for the same shipment of merchandise, the Actual Invoice and the Customs Invoice. In a second version of the double-invoicing scheme, the overseas manufacturer provided DELTA with only the Actual Invoice; a Customs Invoice was created by other means and provided by DELTA to the Customs Broker.
From at least in or about 2011 through at least in or about 2016, ILOULIAN and his co-conspirators also engaged in a fabric-type scheme. To effect the fabric-type scheme, DELTA directed an overseas manufacturer to misstate the composition of the fabric in the apparel in order to obtain a lower duty rate. Specifically, the invoice would indicate that the imported goods were predominantly made of cotton rather than from man-made fibers, even though the reverse was true. The falsified invoices were then presented to CBP, which allowed DELTA to pay lower customs duties than DELTA actually owed, because materials containing more cotton than man-made materials are subject to lower duty rates.
These multi-year fraud schemes resulted in the loss of hundreds of thousands of dollars in duty revenue to the United States.
ILOULIAN is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of falsely effecting the entry of goods into the United States, which carries a maximum sentence of two years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ILOULIAN and DELTA are also charged with civil claims under the False Claims Act, through which the Government may recover treble damages and civil penalties arising from his conduct.
Ms. Strauss thanked HSI, CBP, and the Special Agents of the United States Attorney’s Office for the Southern District of New York for their efforts and ongoing support and assistance with the case.
The charges contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the texts of the indictment and the civil complaint, and the descriptions of the indictment and civil complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
No comments:
Post a Comment