Fashion Customs Fraud: Four Years and $10.4 million

A California fashion company executive was sentenced today to 48 months in federal prison for undervaluing imported garments in a scheme to avoid paying millions of dollars in customs duties.

Mohamed Daoud Ghacham, 40,  was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay $6,390,781 in restitution. 

Ghacham pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse.

Ghacham’s company, Ghacham Inc., which does business under the “Platini” brand name, imported clothing from China and submitted fraudulent invoices to U.S. Customs and Border Protection (CBP) that undervalued the shipments, allowing the company to avoid paying the full amounts of tariffs owed on the imports.

At Mohamed Ghacham’s direction, Chinese suppliers would prepare two invoices for the clothing ordered by Ghacham Inc. – a true invoice, which reflected the actual price paid for the goods, and a fraudulent “customs invoice,” which reflected an understated price. Ghacham Inc. submitted the customs invoices to CBP and customs brokers to fraudulently reduce the tariffs owed on the imports, while it maintained the true invoices in its accounting records.

From July 2011 to February 2021, Ghacham Inc. and Mohamed Ghacham undervalued imported garments by more than $32 million and failed to pay approximately $6,390,792 in customs duties.

Ghacham Inc. pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse and one count of conspiracy to engage in any transaction or dealing in properties of a specially designated narcotics trafficker under a statute known as the Foreign Narcotics Kingpin Designation Act for doing business with María Tiburcia Cazarez Pérez.

Cazarez Pérez previously was listed as a Specially Designated Narcotics Trafficker under the Kingpin Act for her involvement in the financial network of Ismael “El Mayo” Zambada García and Victor Emilio Cazares Salazar, two leaders of the Mexico-based Sinaloa Cartel. Cazares Salazar was sentenced to 15 years in federal prison for drug trafficking activities in federal cases out of San Diego and New York City.

In December 2023, Judge Frimpong fined Ghacham Inc. $4 million, ordered it to pay $6,390,781 in restitution, and placed it on probation for five years.

[Announcement]