San Diego customs broker guilty of tax scheme - San Diego, California News Station - KFMB Channel 8 - cbs8.com

San Diego customs broker guilty of tax scheme

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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.

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