Source: United States Department of Justice Criminal Division
LOS ANGELES – A wholesale clothing importer located in the Fashion District of downtown Los Angeles and two of its executives have been sentenced for avoiding the payment of more than $8 million in customs duties on imported clothing, and for running a scheme in which the company laundered money and failed to report on tax returns more than $17 million derived from cash transactions, the Justice Department announced today.
On late Monday, C’est Toi Jeans Inc. (CTJ), which imported apparel from China and other nations and exported clothing to customers in Mexico, Central America, and South America, was sentenced by United States District Judge Mark C. Scarsi to five years of probation and was ordered to submit to federal monitoring. Judge Scarsi also fined CTJ $11.5 million and ordered it to pay more than $15 million in restitution.
Si Oh Rhew, 71, of La Cañada Flintridge, CTJ’s president and a 75% owner of the company, was sentenced by Judge Scarsi to 103 months in federal prison, fined $8 million, and was ordered to pay more than $19 million in restitution.
Lance Rhew, 38, of downtown Los Angeles, Si Oh Rhew’s son, a CTJ corporate officer, and the owner of another Los Angeles-based company called GLLR Inc. that did business as CTJ, was sentenced to 84 months in federal prison, fined $500,000, and was ordered to pay restitution.
CTJ was a business owned by Si Oh Rhew and his wife that the Rhews operated. CTJ received U.S. currency in bulk cash that was derived from drug trafficking as payment for customer invoices. Those funds were delivered to CTJ by money couriers unrelated to and unknown to CTJ or to the customers whose invoices were being paid.
CTJ and Si Oh Rhew failed to file currency transaction reports, which are required for any transaction involving more than $10,000 in cash, and the defendants concealed the cash receipts from an accountant who prepared their taxes, which led to the fraudulent omission of more than $17 million in gross sales from tax returns filed with the IRS.
The defendants also avoided customs duties and tariffs by purchasing garments from overseas manufacturers, including from China, but then submitting false information to United States Customs and Border Protection (CBP) that understated the true value of the items being imported into the United States.
As a result, the import duties owed on the shipments were lowered. The indictment alleges that the defendants sent 515 individual wire transfers totaling $137,156,726 to pay overseas suppliers for undervalued garments. Overall, CTJ imported goods that were undervalued by more than $51 million, causing approximately $8.4 million in unpaid tariffs and duties that should have been paid to CBP.
At the conclusion of a six-week trial, CTJ and Si Oh Rhew were found guilty by a jury in October 2024 of two conspiracies and multiple counts of failure to file reports of currency transaction over $10,000 in a trade or business. All three defendants were found guilty of three counts of entry of falsely classified goods, three counts of entry of goods by means of false statements, three counts of passing false and fraudulent papers through a customhouse, and two counts of international promotional money laundering.
CTJ was found guilty of an additional two concealment money laundering counts involving drug proceeds. Si Oh Rhew was found guilty of an additional two counts of aiding, assisting, and procuring the filing of a false tax return. Lance Rhew was found guilty of one additional count of aiding, assisting, and procuring the filing of a false tax return. Lance Rhew was also found guilty of one conspiracy count.
The jury found the defendants not guilty of several additional criminal counts, including – for CTJ – two counts of concealment money laundering and – for Lance Rhew – several counts of failure to file a report of a currency transaction in a nonfinancial trade or business.
This case was investigated by Homeland Security Investigations and IRS-Criminal Investigation. They were aided by U.S. Customs and Border Protection, the Monterey Park Police Department, the El Segundo Police Department, the Long Beach Police Department, the Los Angeles Police Department, the Gardena Police Department, and the West Covina Police Department.
This case is part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime.
The investigation was conducted by the HSI-led El Camino Real Financial Crimes Task Force, a multi-agency task force that includes federal and state investigators who are focused on financial crimes in Southern California.
Assistant United States Attorney Lana Morton Owens of the Transnational Organized Crime Section prosecuted this case.