This week, executives for a Los Angeles-based freight forwarder were accused of illegally smuggling billions of dollars’ worth of goods from the United States into Mexico.

On May 27, Ralph Olarte, 55, the chief financial officer of freight forwarder Sport LA, was arrested at the Los Angeles International Airport after a 22-count federal grand jury indictment was filed charging him and the company’s chief executive officer Humberto Lopez Belmonte, 53, of Mexico City.

The two men and Sport LA are charged with with one count of conspiracy to smuggle goods from the United States, three counts of knowingly submitting false and misleading export information, five counts of wire fraud for false information submitted to U.S. Customs and Border Protection (CBP), one count of conspiracy to commit wire fraud against Mexico, one count of conspiracy to commit money laundering, and seven counts of international promotional and concealment money laundering.

Additionally, Sport LA is charged with three counts of making false statements to a government agency. Other defendant companies, H&R Logistics Inc. and Olarte Transport Service Inc., are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.

The indictment accuses Olarte and Lopez of using fraudulent documents, shell companies, bribes to public officials, and kickbacks to Mexican drug cartels to smuggle billions of dollars’ worth of goods from the United States into Mexico, repeatedly lying to U.S. customs officials and defrauding Mexico out of hundreds of millions of dollars’ worth of duties owed. 

According to charging documents, from 2013 to the present, Olarte and Lopez operated a “lucrative” shipping enterprise and used companies they controlled to smuggle billions of dollars’ worth of goods from and through the United States into Mexico. The smuggled goods often contained contraband, according to officials.

“The companies allegedly submitted millions of false and misleading statements to U.S. customs officials, used shell companies in Mexico to shield their true customers, and created and presented false documents – including sham certificates for paid Mexican import taxes. They also bribed Mexican customs officials, paid kickbacks to drug cartels – including the Jalisco New Generation Cartel – to operate the scheme and smuggled bulk cash into the U.S. to avoid reporting requirements. Olarte and Lopez then laundered the proceeds of their scheme back from the true Mexican customers, through the shell companies, and ultimately into the companies’ U.S. bank accounts,” said the U.S. Attorney’s Office for the Central District of California.

The smuggling scheme allegedly netted Olarte and Lopez millions of dollars in illicit proceeds.

If convicted, both men face a statutory maximum sentence of 20 years in federal prison for each count of wire fraud- and money laundering-related count, up to five years in federal prison for each smuggling- and false statements-related count, and up to two years in federal prison for each count of knowingly submitting false and misleading export information. 

This case is under investigation by Homeland Security Investigations, CBP, the Internal Revenue Service Criminal Investigation, and the Drug Enforcement Administration