L.A. Fashion District executives sentenced in $25 Million fraud and laundering scheme

CALIFORNIA – The U.S. Department of Justice (DOJ) announced that a downtown L.A. clothing importer and two executives were sentenced for evading $8 million in customs duties and laundering $17 million in unreported cash.

C’est Toi Jeans Inc. (CTJ) was sentenced to five years’ probation and ordered to submit to federal monitoring by U.S. District Judge Mark C. Scarsi. The court 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 majority owner, was sentenced to 103 months in prison, fined $8 million, and ordered to pay over $19 million in restitution.

Lance Rhew, 38, of Los Angeles — Si Oh Rhew’s son, CTJ officer, and owner of GLLR Inc., was sentenced to 84 months in prison, fined $500,000, and ordered to pay restitution.

Accepted cash from drug trafficking

Si Oh Rhew and his wife operated CTJ, which accepted bulk cash from drug trafficking to pay customer invoices.

Money couriers, unrelated to CTJ or its customers, delivered the funds to pay invoices.

CTJ and Si Oh Rhew failed to file required cash transaction reports, concealed receipts from their accountant, and omitted over $17 million in sales from IRS tax returns.

The defendants evaded customs duties by buying garments overseas, including from China, and submitting false valuations to U.S. Customs and Border Protection (CBP).

This scheme reduced the import duties owed.

The indictment says the defendants sent 515 wire transfers totaling $137 million to pay overseas suppliers for undervalued garments.

CTJ undervalued imports by over $51 million, avoiding about $8.4 million in tariffs and duties owed to CBP.

Six-week trial

After a six-week trial in October 2024, a jury found CTJ and Si Oh Rhew guilty of two conspiracies and multiple counts of failing to report cash transactions over $10,000.

All three defendants were convicted of multiple customs fraud charges, two counts of international money laundering, and other offenses.