Manhattan U.S. Attorney Announces Criminal And Civil Charges Against CEO Of Clothing Company For

Manhattan U.S. Attorney Announces Criminal And Civil Charges Against CEO Of Clothing Company For Million-Dollar Customs Fraud


Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Angel M. Melendez, the Special Agent in Charge of the New York Office of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), and Troy Miller, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), announced today the filing of criminal and civil charges against JOSEPH BAILEY, the CEO of a children’s apparel company headquartered in Manhattan. BAILEY was charged, in an indictment unsealed today, with participating in a years-long scheme to defraud U.S. Customs and Border Protection (“CBP”) by submitting invoices to CBP that falsely understated the true value of the goods his company imported into the United States. BAILEY’s scheme resulted in the loss of over $1 million in duty revenue to the United States.

BAILEY was arrested today, and will be presented before Chief U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court later today. The criminal case has been assigned to U.S. District Judge William H. Pauley III. In addition, a civil fraud lawsuit against BAILEY and his companies, Stargate Apparel, Inc. (“STARGATE”) and Rivstar Apparel, Inc. (“RIVSTAR”), which is assigned to U.S. District Judge J. Paul Oetken, was unsealed in Manhattan federal court earlier today. The civil complaint, which was filed on April 19, 2019, under seal, asserts that BAILEY, STARGATE, and RIVSTAR violated the False Claims Act by submitting invoices to CBP that falsely understated the true value of the goods they imported into the United States. The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.

U.S. Attorney Geoffrey S. Berman said: “As alleged, Joseph Bailey defrauded the United States by several schemes with one theme – misrepresenting the value of imported goods to avoid payment of customs duties. Bailey now faces criminal charges for his alleged fraud, and the government’s civil suit seeks treble damages and penalties against Bailey and his companies.”

HSI Special Agent in Charge Angel M. Melendez said: “Bailey is alleged to have undervalued imported goods, leading to a loss to the government of more than a million dollars in duty revenue. It is important to remember that customs fraud is not a victimless crime, as it affects legitimate trade and business. Trade enforcement is a priority for HSI, and we will continue to partner with CBP as we investigate those fraudsters and bring them to justice.”

Read more: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-criminal-and-civil-charges-against-ceo-clothing-company