SAN DIEGO (AP) - The head of the San Diego Customs Brokers Association has pleaded guilty in a scheme to avoid paying $18 million in import taxes on Chinese-made clothing, Indian cigarettes and other foreign goods.
The U.S. attorney's office says Gerardo Chavez and co-defendant Carlos Medina pleaded Thursday to conspiracy to defraud the government and bringing in goods by means of false statements. Chavez also pleaded to money laundering and could face a 20-year sentence.
Chavez's trade group represents 45 brokers doing business on California's Mexican border.
Chavez arranged phony paperwork showing that $100 million worth of foreign goods shipped to the Long Beach port were destined for Mexico and thus exempt from custom duties.
The effectively tax-free goods were then sent to Southern California warehouses and sold in the U.S., undercutting competitors.
Copyright 2012 The Associated Press.