Avoiding more than $1 million in duties, tariffs brings guilty pleas

SAN JUAN, Puerto Rico – An investigation conducted jointly between Homeland Security Investigations (HSI)-San Juan and Customs and Border Protection (CBP) has uncovered a conspiracy to smuggle goods into the United States to avoid paying more than $1 million in duties and tariffs.

The case has resulted in guilty pleas by Akua Mosaics, Inc. (“Akua Mosaics”) and its president, identified as Kenneth Fleming, who is charged with conspiring to smuggle goods into the U.S.

According to the plea agreements, from 2021 through June 2022, Akua Mosaics and Fleming conspired to defraud the U.S. by smuggling and clandestinely importing porcelain mosaic tiles manufactured in the People’s Republic of China (PRC). CBP officers determined the merchandise was of Malaysian origin. According to federal prosecutors, the imports were intended to avoid paying antidumping duties, countervailing duties, and other duties which were owed when importing the tiles from the PRC to the U.S.

Working with CBP, HSI special agents investigating the case also determined that Fleming and Akua Mosaics conspired with Shuyi Mo, a citizen and resident of the PRC. Between October 2021 and January 2022, investigators learned of plans involving a container with porcelain tiles manufactured in PRC to be shipped from the PRC to Malaysia. “Made in Malaysia” labels were placed on boxes containing porcelain tiles manufactured in the PRC.

Additionally, the scheme resulted in a container with porcelain tiles manufactured in the PRC to be shipped from Malaysia to Puerto Rico, misrepresenting the country of origin as Malaysia, when in fact, PRC was the country of origin. The total amount of unpaid duties and tariffs on this shipment was approximately $1,090,000.

Mo was arrested in April 2023 in the Northern District of California while attempting to the leave the U.S. He pleaded guilty to his participation in the conspiracy and was sentenced in September 2023. After serving several months in jail, was removed from the U.S.

Fleming and Akua Mosaics face a maximum penalty of five years in prison, a $250,000 fine, a three-year term of supervised release, and a payment of $1,090,000 in restitution. A federal district court judge will determine any sentence after considering the U.S. sentencing guidelines and other statutory factors.