California freight forwarder charged with smuggling billions in goods

Yahoo

5 days ago

Executives at a Los Angeles freight forwarding company smuggled billions of dollars in goods into Mexico from the U.S. for over a decade in a lucrative scheme involving drug cartels and corrupt customs agents, federal prosecutors say.
Ralph Olarte, 55, and Humberto Lopez Belmonte, 53, used 'fraudulent documents, shell companies, bribes to public officials, and kickbacks to Mexican cartels' in the scheme, which lasted from at least 2013 to 2024, according to the 22-count indictment against Olarte, Lopez and their company, Sport LA Inc., in the U.S. District Court for the Central District of California.
Olarte, a U.S. citizen, and Lopez, a citizen of Mexico, allegedly hid the nature of the goods as well as the identities of the actual recipients from U.S. Customs and Border Protection. Among items originating in the U.S. and exported to Mexico or funneled through the U.S. from other countries and then to Mexico were contraband including counterfeit cell phone batteries and medical devices, as well as goods that required licenses, such as handguns, ammunition, electronic cigarettes and marijuana, the indictment states. Mexican shell companies received the goods.
The defendants avoided paying hundreds of millions of dollars in duties owed to the Mexican government by bribing Mexican customs officials, according to a statement from the U.S. Attorney's Office.They used WhatsApp to direct truck drivers into specific Mexican customs lanes where officials who had been bribed were assigned. The agents permitted the trucks to enter Mexico without paying duties, the indictment alleges.
The defendants then smuggled large amounts of cash from payment for the goods into the U.S., which they laundered through the Mexican shell companies and back to the shipping companies they controlled.
'Throughout the conspiracy, defendants OLARTE and LOPEZ wired, and caused to be wired, tens of millions of dollars from the shell consignee accounts to the HRL defendants,' according to the indictment. Both men allegedly received millions of dollars in the scheme.
Sport LA Inc. was a bonded freight carrier that did business as HRL, H&R Logistics and under other names. Lopez was CEO and secretary, and Olarte was chief financial officer. Bonded carriers are permitted to ship goods through the United States to other countries.The defendants also facilitated kickbacks to the Jalisco New Generation Cartel and other cartels, which allowed them to continue operations, and used contacts with law enforcement in Mexico to ensure the goods reached their intended destinations, prosecutors say.
The charges range from conspiracy to commit money laundering to smuggling goods from the United States to submitting false and misleading export information.
Lopez pleaded not guilty on Tuesday, the day he was arrested, the U.S. Attorney's Office said. A July 21 trial date was scheduled, and he was ordered released on a $100,000 bond. It was not immediately clear whether Olarte, who was also arrested on Tuesday, had entered a plea.
If convicted, Olarte and Lopez face up to 20 years in federal prison for each count related to wire fraud and money laundering, up to five years for each count related to smuggling and making false statements, and up to two years for each count of knowingly submitting false and misleading export information.
Mark Werksman, Lopez's lawyer, told Courthouse News Service that Lopez denies the accusations.
'We look forward to defending against these charges in court, and we're confident that a jury will agree that Mr. Lopez, his co-workers and his company did nothing wrong,' Werksman said.
Homeland Security Investigations, CBP, IRS Criminal Investigation and the Drug Enforcement Administration are involved in the investigation.
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