Customs Broker Sentenced to Prison, Fined $1 Million for Defrauding Importer
The Justice Department reports that a Long Island customs broker has been sentenced in federal court on charges that he defrauded a Massachusetts medical equipment distributor out of over $1 million dollars.
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Broker Sentenced to 2 Years in Jail, to Pay Restitution for Defrauding Client
The broker, Gregory Manuelian, was sentenced to 24 months in prison, to be followed by 3 years of supervised release and ordered to pay $1,188,886.97 in restitution, based on charges that he defrauded his client, B-K Medical Systems, a Danish subsidiary of Massachusetts-based Analogic Corporation, by repeatedly submitting phony customs documents which indicated that B-K owed customs duties on goods that were actually duty free.
Broker Continued to Charge Client for Duties that Were Phased Out by 1999
Manuelian operated a customs brokerage in Jamaica, New York called Marquis Clearance, Ltd., and had served as B-K's customs broker since 1980. When B-K's goods entered the U.S., Manuelian ordinarily paid duties and routine charges on them, and then faxed invoices to B-K listing the goods and the duties pre-paid on B-K's behalf. B-K reimbursed Manuelian for the duties, along with a brokerage fee.
In 1996, the U.S. Department of Commerce began to phase out the duties on the types of medical equipment imported by B-K, such that by 1999, the goods were duty free.
Broker Mailed Client False Customs Forms Showing Duty Owed
Despite the phasing out of the duties, Manuelian continued to bill B-K for pre-paid duties on its equipment, even though he paid none. To legitimize each invoice, Manuelian mailed B-K false customs forms which showed a duty owed on the medical equipment, usually equal to 5.3% of the equipment's value. In so doing, Manuelian repeatedly induced B-K to reimburse him for duties that he never actually paid, in amounts ranging from $1,000 to $9,000. By the time B-K discovered its loss in 2006, Manuelian had defrauded it out of a total of approximately $1.2 million.
Justice Dept press release (dated 02/18/10) available at http://www.justice.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Feb2010/ManuelianGregorySentencingPR.html