CALIFORNIA — A San Francisco Federal grand jury indicted defendants:

  • Dale Behm, 75
  • Yong Heng Liang, 34
  • Joshua Stanka, 41
  • Joshua Clark, 38
  • Michael Choy, 47

with charges of conspiracy and wire fraud on Tuesday, August 25. The defendants operated an alleged scheme to submit fraudulent claims for refunds on import duties to defraud the United States $40 million.

The defendants submitted multiple claims for refunds to recover tariffs that were properly owed to import taxes through the use of a shell tire recycling company in Hayward, California. The recycling company has been proven as a money laundering front as it had no recycling equipment and shipped containers of thousands of used tires to countries into Asia.

According to the indictment, companies involved the scheme included the San Francisco based raw plastics importer, The Pacific Rim Traders, LLC. Pacific Rim maintained a customs bond and had entitlement to accelerated refund checks from the U.S. Treasury. The indictment describes how the defendants submitted documents allowing Pacific Rim to receive refund checks by making it appear that shipping containers filled with used tires and scrap plastic were full of drawback-eligible virgin plastic material. High quality plastic receives larger refund amounts in the United States.

Fraudulent invoices made by defendant Behm presented Pacific Rim as a large selling Virgin Astic material source to companies in Asia.  With that information, Behm directed a San Francisco-based customs broker to use the falsified documents to prepare customs drawback claims. The claims sought refunds for as much as $655,000 at a time.

128 containers shipped by defendant Liang were found abandoned in Busan.  A comparison of the export documents to the refund claims suggests the coconspirators altered the paperwork so that “scrap rubber” appeared as “PFTE Resin” and “EFTE Resin.”  The indictment alleges Pacific Rim received at least $6,400,000 in fraudulent refunds while other clients of Stanka, Clark, Choy, and Liang obtained as much as an additional $34,000,000 in total refunds.

The defendants are charged with the following crimes:

Count Violation Description Defendant(s) Charged
1 18 U.S.C. § 286 Conspiracy To Defraud the Government With Respect To Claims All Defendants
2-16 18 U.S.C. § 287 False, Fictitious, Or Fraudulent Claims All Defendants
17-28 18 U.S.C. § 1343 Wire Fraud All Defendants
29-30 18 U.S.C. § 1341 Mail Fraud Yong Heng Liang
31 18 U.S.C. § 1957 Engaging In Monetary Transactions In Property Derived From Specified Unlawful Activity Joshua Stanka
32 Joshua Clark
33 Joshua Stanka
34 Joshua Stanka
35 Joshua Clark
36 Joshua Stanka; Joshua Clark
37 Joshua Clark; Michael Choy
38 Joshua Clark
39 18 U.S.C. § 1956(a)(2)(A) Laundering Of Monetary Instruments Yong Heng Liang; Michael Choy
40 Yong Heng Liang; Michael Choy
41 Joshua Clark; Michael Choy
42 Yong Heng Liang; Michael Choy
43 18 U.S.C. § 1519 Destruction, Alteration, Or Falsification Of Records In Federal Investigations And Bankruptcy Yong Heng Liang

 

If convicted, the defendants face maximum sentences as follows:

Violation Description Maximum Penalties
18 U.S.C. § 286 Conspiracy To Defraud The Government With Respect To Claims 10 Years;

$250,000 fine;

3 Years Supervised Release
18 U.S.C. § 287 False, Fictitious, or Fraudulent Claims 10 Years;

$250,000 fine;

3 Years Supervised Release
18 U.S.C. § 1343 Wire Fraud 20 Years;

$250,000 fine;

3 Years Supervised Release
18 U.S.C. § 1341 Mail Fraud 20 Years;

$250,000 fine;

3 Years Supervised Release
18 U.S.C. § 1957 Engaging In Monetary Transactions In Property Derived From Specified Unlawful Activity 10 Years;

$250,000 fine;

3 Years Supervised Release
18 U.S.C. § 1956(a)(1)(A) Laundering Of Monetary Instruments 20 Years;

$500,000 fine, or twice the value of property involved in the transaction;

3 Years Supervised Release
18 U.S.C. § 1519 Destruction, Alteration, Or Falsification Of Records In Federal Investigations And Bankruptcy 20 Years;

$250,000 fine;

3 Years Supervised Release

 

The case is being prosecuted by the Special Prosecutions section of the United States Attorney’s Office with the assistance of Beth Margen and Lance Libatique.  The prosecution is the result of an investigation by HSI and IRS-CI.