An L.A. Fashion District wholesaler, C'est Toi Jeans, Inc. (CTJ), along with its two executives have been convicted on multiple charges of money laundering and tax evasion, according to the U.S. Attorney's Office, Central District of California. In a six-week trial that concluded on Tuesday, the defendants were found guilty of several felonies, including failure to accurately report over $17 million in cash-derived transactions and avoidance of more than $8 million in customs duties.
The proceedings revealed that Si Oh Rhew, 70, the company's president, and his son Lance Rhew, 37, a corporate officer of CTJ, were engaged in a scheme to undervalue imported apparel, which was mainly sourced from China. The aim was to artfully avoid higher tariffs and duties owed to U.S. Customs and Border Protection. Si Oh Rhew and his company were also implicated in additional counts of money laundering that involved drug proceeds, as noted by the U.S. Attorney's Office, Central District of California.
"Money laundering is the lifeblood of large-scale drug trafficking, and it is therefore essential that we go after businesses and individuals that feed criminal organizations the money they crave," United States Attorney Martin Estrada stated. The sentiment was echoed by Homeland Security Investigations Los Angeles Special Agent in Charge Eddy Wang, who commented, "This verdict should send a strong message to those who utilize their businesses to aid the cartels, that the HSI Los Angeles-led El Camino Real Financial Crimes Task Force and partners at U.S. Customs and Border Protection, and the IRS Criminal Investigation, will work tirelessly to hold you accountable," as per the U.S. Attorney's Office.
With the sentencing set for January 21, 2025, the Rhews now face potential decades in federal prison, and CTJ could be hit with fines up to $100 million. This case, part of Operation Fashion Police and investigated by a coalition of law enforcement including the El Camino Real Financial Crimes Task Force, underscores the commitment of federal agencies to crack down on financial fraud and their collusion with narcotics trafficking. Assistant United States Attorneys MiRi Song, Julie J. Shemitz, and Skyler F. Cho spearheaded the prosecution of this case.
