Case Document 3 Entered on FLSD Docket 11/25/1997 Page 1 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA UNITED STATES OF AMERICA, O. 0 2 I 18 U.S.C. ?371 18 U.S.C. MAGIS 1 RATE JUDGE 26 ?720] v_ 26 U.s.c. ?7206(1) 18 U.S.C. ?2 REMEDIOS DIAZ OLIVER FRANCISCO HERNANDH-PEREZ, LILLIAM MARTINEZ, CLAUDIO L. MARTINEZ, FAUSTO DIAZ OLIVER, ij Q, jj and INDICTMENT VICENTE HERNANDEZ-PEREZ, D- . CJ FG I gi'; fi Egm e. The Grand Jury charges that: gt QOQNI 1 TQ EYADE DUTIES AND TQ DEFRAQQ THE INQLAL REYQ QE SERYIQE (18 U.S.C. ?371) 1. From in or about July of 1987, through on or about May 10, 1996, in Miami, Dade County, in the Southem District ofFlo1ida and elsewhere, the defendants, REMEDIOS DIAZ OLIVER, FRANCISCO HERNANDEZ-PEREZ, LILLIAM MARTINEZ, CLAUDIO L. MARTINEZ, FAUSTO DIAZ OLIVER, and VICENTE HERNANDEZ-PEREZ, Case Document 3 Entered on FLSD Docket 11/25/1997 Page 2 of 35 did knowingly and williirlly combine, conspire, confederate and agree with each other, and with te States and to defraud the United States as follows: a) to understate the true cost of imported merchandise on invoices, declarations, papers and statements, in order to deprive the United States of lawiirl duties accruing upon merchandise embraced and referred to in such invoices, declarations, papers and documents, in violation of Title 18, United States Code, Section 542; and b) to the United States for the purpose of impeding, impairing, obstructing, and defeating the lawiirl government iirnctions of the Internal Revenue Service of the United States Treasury Department in the computation, assessment, and collection of the revenue: to wit income taxes, in violation of Title 18, United States Code, Section 371. At all times relevant to this Indictment: 2. Spanish Foods, Incorporated ("Spanish Foods"), was a Florida corporation based in Dade County, Florida. Spanish Foods was initially incorporated in July of 1987 under the name "Foods From Spain, Incorporated." In September of 1989 the name ofthe company was changed to Spanish Foods. Spanish Foods imported food products from Spain and other countries and Statesand elsewhereunderthebrandname of"La Molinera." 3. Hernandez-Perez Hermanos, SA was a company incorporated and located in Spainwhichpackagediiuits andvegetablesforsalein Spainandelsewhere. HPH owned the brand 2 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 3 of 35 name"I..aMoliners." SpanishFoods purchased many ofits food products li?omHPHin Spain and imported those products into the United States. 4. Defendants VICENTE HERNANDEZ--PEREZ and his son FRANCISCO HERNANDEZ-PEREZ were managing directors and principals of HPH. Through HPH, they purchased, owned and controlled 51% ofthe shares of Spanish Foods. Defendant FRANCISCO HERNANDEZ-PEREZ wasthe ofSpanishFoods and laterbecamethe Chairman of its Board of Directors. Defendant VICENTE HERNANDEZ-PEREZ was a member ofthe Board of Directors of Spanish Foods. 5. Defendants VICENTE HERNANDEZ-PEREZ and FRANCISCO HERNANDEZ- PEREZ also owned and controlled Hesperides, S.A, ("Hesperides") a subsidiary of HPH incorporated in Spain. 6. Defendants RHVIEDIOS DIAZ OLIVER and her husband FAUSTO DIAZ OLIVER participated in the creation, operation and management of Spanish Foods. Through nominees, they owned24.5% ofthe shares ofSpanishFoods The nominees were theirtwo children, each ofwhom purportedly held 12.25% of Spanish Foods's shares in their respective names. 7. Defendants LILLIAM MARTINEZ and her husband CLAUDIO L. MARTINEZ Owned the remaining 24.5% ofSpanish Foods' shares. Defendant LILLIAMMARTHWEZ served as Vice-President and later as President ofSpanish Foods. 8. 'I`hai Corporation, LTD., was a incorporated in Tortola, British Virgin Islands, whidi was owned and controlled by defendants REMEDIOS DIAZ OLIVER and FAUSTO DIAZ OLIVER These defendants concealed their ownership and control of Thai Corporation, LTD., through nominees. Defendants REMEDIOS DIAZ OLIVER and FAUSTO DIAZ OLIVER 3 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 4 of 35 used 'I`hai Corporation, LTD., to help conceal the movement of funds involved in the conspiracy as 9. First Royalrock, Inc., was a shelf company incorporated in Tortola, British Virgin Islands,whichwas MARTINEZ MARTINEZ. These defendants concealed their ownership and control of First Royalroclg Inc., through nominees. Defendants CLAUDIO L. MARTINEZ and LILLIAM MARTINEZ used First Royalrock, Inc. to help conceal the movement of iimds involved in the conspiracy as well as their ownership and control over said iimds. 10. Roster, S.A., was also a Tortola, British Virgin Islands. Roster, SA, was owned and controlled by defendants FRANCISCO HERNANDEZ-PEREZ and VICENTE HERNANDEZ-PEREZ. These defendants used Roster, S.A, to help conceal the and control oversaid timds. 11. American Intemational Container, Inc., was a company incorporated in Florida and located in Dade County, Florida AIC was a distributor of plastic and glass containers. DIAZ OLIVERwasthe Vice-President and was in charge ofthe day to day operation ofthe cornpanyuntil approximately October of 1991. The defendants used AIC to further their scheme to evade U.S. customs duties. 12. ICEX was an agency ofthe Spanish government which reimbursed advertising and start-up expenses of foreign companies owned by Spanish nationals that imported Spanish products. During the course of the conspiracy, Spanish Foods obtained subsidies from ICEX for purported costs incurred by Spanish Foods. 13. The U.S. Customs Service is an agency ofthe United States Treasury Department 4 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 5 of 35 empowered to assess and collect duties on products imported into the United States. 14. Thelnternalkevenue Serviceisanagency ofthe United States Treasury Department empowered to compute, assess and collect personal and corporate income taxes. PQQOSE AND QBJEQT QF THE 15. It was a purpose and object ofthe conspiracy for the defendants to unlawlirlly earn evading the payment ofU.S. urstoms duties on products imported by Spanish Foods into the United States and to conceal earnings from the Internal Revenue Service by claiming those earnings as ictitious expenses on the corporate income tax retums of Spanish Foods and by omitting those earnings ii?om their personal income tax retums. THE MANNER Ay]; MEAN QF THE 16. The defendants created and presented to the U.S. Customs Service Haudulent invoices to evade. duties on food products imported by Spanish Foods into the United States. For each shipment of goods, for which duties were assessed based upon the cost ofthe goods, two invoices were prepared: a fraudulent invoice which reflected approximately 40-60% of the true cost of the goods and a legitimate invoice which accurately reflected 100% of the cost of the goods. The iiaudulent were presented to the U.S. Customs Service for the assessment of customs duties and the legitimate invoices, never provided to the U.S. Customs Service, were recorded on the corporate books and records of Spanish Foods. 17. At the early stages of the conspiracy, the defendants issued two checks to pay the legitimate invoice reflecting 100% ofthe cost ofthe goods: one check ii?om Spanish Foods for the costs declared to the U.S. Customs Service on the 'ri?audulent invoice and a second check from AIC, a company unrelated to the importation, for the undeclared costs omitted from the fraudulent invoice. 5 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 6 of 35 18. The defendants created fictitious business expenses listed as "Commissions Outside the (hereinafter "iictitious commissions") and recorded those expenses on the books and records of Spanish Foods. These Eaudulent expenses were accrued on the books and records of Spanish Foods. 19. The defendants claimed these fictitious commissions on Spanish Foods corporate income tax returns for 1988 through 1991 thereby reducing Spanish Foods' corporate income tax liability for those years. 20. 'I'he ddendants paid themselves iimds from Spanish Foods disguised as payments of the iictitious commissions which had accrued on the corporate books and records of Spanish Foods. Thedefendants concealedtheirreceipt subsidiary in Spain. 21. The defendant also used three oifshore shelf companies based in Tortola, British ownership ofthe timd paid by Spanish Foods as fictitious cormnissions. The BVI companies were Thai Corporation, LTD., controlled by defendants REMEDIOS and FAUSTO DIAZ OLIVER, First Royalrock, Inc., controlled by defendants LH.LIAM and CLAUDIO MARTINEZ and Roster, S.A., controlled by VICENTE and FRANCISCO HERNANDEZ-PEREZ. 22. The defendants opened bank accounts for each of the BVI companies at Hamilton Bank in Miami, Florida In eiforts to conceal their ownership and control of both the bank account for Thai Corporation, LTD., and the Binds deposited therein, defendants REMEDIOS DIAZ OLIVER and FAUSTO DIAZ OLIVER used and caused to be used iraudulent identification documents and forged signatures of unwitting nominees to open the account and conduct 6 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 7 of 35 transactions. First Royalrock, Inc., and the firnds deposited therein, defendants CLAUDI0 L. MARTINEZ and LILLIAM MARTINEZ also used and caused to be used fraudulent identification documents and forged signatures of unwitting nominees to open the account and conduct transactions. 23. The defendants also prepared and proqrred false statements, and other documents, control ofthe BVI companies' bank accounts and the diverted iirnds deposited therein. 24. checks from bank account at Banco Santander in Murcia, Spain. The cashier's checks were account oftheBVI companies at HamiltonBankinMiami, Florida Alter these fimd were deposited into the BVI companies' bank accounts, the defendants reinvested them in Spanish Foods as purported loans from shareholders. 25. Defendants REMEDIOS DIAZ OLIVER LH.LIAM MARTINEZ, CLAUDIO. L. MARTINEZ returns fortheyears 1991 and 1992 in SpanishFoods as purported loans from shareholders through the BVI compani bank accounts. 26. '1`he defendants made two additional payments ofthe accrued fictitious commissions to associates of defendant CLAUDIO L. MARTINEZ which were also designed to disguise the distribution of tirnds &om Spanish Foods to the defendants. These funds were also reinvested in Spanish Foods as purported shareholder loans through the BVI companies' bank accounts. 27. Revenue Servicewhich SpanishFoods received intheform ofSpanish subsidies from ICEX in 1991. 7 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 8 of 35 The defendants transferred the $47,000 in subsidies to Spanish Foods as shareholder loans through the bank accounts of the BVI companies. The fimds sent &om ICEX were divided among the accounts ofthe BVI companies according to the respective ownership interests ofthe defendants in Spanish Foods. atleast one ofthefollowing withintheSouthem District of Florida, and elsewhere: 28. On m? about November 30, 1987, defendant REMEDIOS DIAZ OLIVER caused fromHPH fraudulent invoicestobeprovided to the United States Customs Service (Customs) regarding a shipment of products from HPH to Spanish Foods. 29. On or about December 11, 1987, defmdant FRANCISCO HERNANDEZ-PEREZ caused tobecreated reflected the total cost ofthe goods itemized on the invoice as $19,650 and the other as $11,790. 30. On or about December 22, 1987, defendant FRANCISCO HERNANDEZ-PEREZ 10.992. Oneinvoice reflected the total cost of the goods itemized on the invoice as $19,570 and the other as $11,742. 31. or about December 22, 1987, defmdant FRANCISCO HERNANDEZ-PEREZ 10.993, which thetotalcost ofthe goods itemized on the invoice as $11,790. 8 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 9 of 35 32. On or about December 22, 1987, defendant LH.LIAM MARTINEZ caused to be presented to Custom fraudulent HPH invoices numbered 10.954, and 10.940, reflecting import costs of $11,790 and $11,610, respectively. 33. On or about January 20, 1988, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent HPH invoices numbered 10.992, and 10.993, reflecting import costs of $11,742 and $11,790, respectively. 34. OnoraboutMay1, 1988, defendantREMEDIOS DIAZ OLIVER authorized AIC check number 12396 made payable to HPH for $31,288, as payment for the difference between the true cost of the goods listed on HPH invoices numbered 10.940, 10.954, 10.992 and 10.993 and the fraudulent versions of these invoices submitted to Customs. 35. On oraboutJulyl, 1988, caused tobepresented to Customs fraudulent invoices numbered 86550 and 86557 from Spanish Foods' vendor Jose Lopez Beltran CIA, each reflecting import costs of $6,244.56. 36. On or about May 12, 1989, defendant LILLIAM MARTINEZ caused to be presented to Customs a fraudulent invoice from Spanish Foods' vendor J. Garcia Carrion, S.A., numbered 890070 and reflecting import costs of $12,885.60. 37. In or about September 1989, defendant REMEDIOS DIAZ OLIVER authorized AIC check number 15951 made payable to J. Garcia Carrion, S.A., for $10,242.40, as payment fromJ. Garcia Carrion, S.A., submitted to Customs, and the true cost of these goods. 38. On or about Novembu 3, 1989, defendant CI..AUDIO L. MARTINEZ authorized and issued Spanish Foods' check number 121 made payable to Spanish Foods' vendor Consorcio 9 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 10 of 35 Agro Industrial Malloa, S.A. as payment for the difference between the cost of the goods reflected in fraudulent invoice number 002064 from Malloa subsequently submitted to Customs, and the true cost of there goods. 39 On or about December 8, 1989, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent Malloa invoice number 002064, import costs of $27,250. 40. On or about December 9, 1989, defendant VICENTE HERNANDEZ-PEREZ caused to becreated HHIKJUIGIIHPH invoicenumber 11.153, which falsely reflected the total cost of the goods itemized on the invoice as $22,685. 41.- On or about December 21, 1989, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent I-IPH invoice number 11.153, reflecting import costs of $22,685. 42. On or about January 14, 1990, defendant FRANCISCO HERNANDEZ-PEREZ 11.212. Oneinvoice reflected the total cost of the goods itemized on the invoice as $16,560 and the other as $27,600. 43. On or about January 26, 1990, defendant LH.LIAM MARTINEZ caused to be presunted to Customs fraudulent HPH invoice number 1.1.212, reflecting import costs of $16,560. 44. On or about February 6, 1990, defendant VICENTE HERNANDEZ-PEREZ 11.224. the total cost ofthe goods itemized on the invoice as $33,120 and the other as $55,200. 45. On or about February 21, 1990, defendant LILLIAM MARTINEZ caused to be presented to Customs HPH invoice number 11.224, reflecting import costs of $33,120. 46. On or about June 1, 1990, defendant VICENTE HERNANDEZ-PEREZ caused to 10 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 11 of 35 be created two versions invoice number 11.620. One invoice reflected the total 00st of the goods itemized on the invoice as $15,316.50 and the other as $25,527.50. 47. On or about June 13, 1990, defendant LHLIAM MARTINEZ caused to be presented to Customs fraudulent HPH invoice number 11.620, reflecting import costs of $15,316.50. 48. In or about July 1990, defendants FAUSTO DIAZ OLIVER, REMEDIOS DIAZ OLIVER and LH.LIAM MARTINEZ met with a representative of Spanish Foods' vendor Juan Antonio Sirvent Selfa, S.A. During the meeting, defendant FAUSTO DIAZ OLIVER requested that IASS provide fraudulent invoices for the products it sold to Spanish Foods for use in evading customs duties. 49. On or about October 11, 1990, defendant LH.LIAM MARTINEZ caused to be presented to Customs fraudulent IASS invoice number 90/000.49, reflecting import costs of $32,543.05. 50. On or about November 9, 1990, defendant VICENTE HERNANDEZ-PEREZ 11.930. Oneinvoicereflected the total cost of the goods itemized on the invoice as $20,073 and the other as $33,455. 51. OnoraboutNovember27, 1990, caused tobe presented to Customs fraudulent HPH invoice number 11.930, reflecting import costs of $20,073. 52. On or about November 30, 1990, defendant FRANCISCO HERNANDEZ-PEREZ 11.982. Oneinvoice reflected thetotal cost of the goods itemized on the invoice as $63,885.36 and the other as $106,475.60. 53. OnoraboutDeoember4, 1990, defendantLH.LIAMMARTINBZcaused tobe 11 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 12 of 35 presented to Customs fraudulent JASS invoice number 90/000-79, reflecting import costs of $40,161.70. 54. OnoraboutDeoember19, 1990, caused tobe presented to Customs fraudulent HPH invoice number 11.982, reflecting import costs of $63,885.36. 55. On or about February 13, 1991, defendant VICENTE 12.149. Oneinvoicereflectedthetotal cost of the goods itemized on the invoice as $38,175.75 and the other as $63,626.25. 56. On or about March 5, 1991, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent HPH invoice number 12.149, reflecting import costs of $38,175.75. 57. On or about May 28, 1991, defendant VICENTE HERNANDEZ-PEREZ caused to be created two versions of HPH invoice number 12.373. One invoice reflected the total cost of the goods itemized on the invoice as $17,374.11 and the other as $28,957.29. 58. On or about June 14, 1991, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent HPH invoice number 12.373, reflecting import costs of $17,374.11. 59. On or about August 24, 1991, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent IASS invoice number 91/00111, reflecting import costs of $52,563. 60. Onor?aboutOctober10, 1991, be sent to Spanish Foods' vendor Antonio Pico Mira, S.A., ('Turrones Pico') wherein she 12 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 13 of 35 tobeprovided to Customs regarding a shipment of products from 'Iurrones Pico to Spanish Foods. 61. On oraboutOctober17, 1991, causedtobe presented to Customs fraudulent Turrones Pico invoice number 788, reflecting import costs of $37,774. 62. On or about March 2, 1992, defendant VICENTE HERNANDEZ-PEREZ caused to be created two versions of HPH invoice number 10.079. One invoice reflected the total cost of the goods itemized on the invoice as $22,809 and the other as $38,015. 63. On or about March 12, 1992, defendant LILLIAM MARTINEZ caused to be presented to Customs fraudulent HPH invoice number 10.079, reflecting import costs of $22,809. 64. On or about May 24, 1992, defendant VICENTE HERNANDEZ-PEREZ caused to be created two versions of HPH invoice number 10.321. One invoice reflected the total cost ofthe goods itemized on the invoice as $18,115.50 and the other as $30,192.50. 65. OnoraboutJunc4, 1992, to Customs fraudulent HPH invoice number 10.321, reflecting import costs of $18,115.50. 66. On or about November 29, 1992, defendant VICENTE HERNANDEZ-PEREZ caused to becreated two versions invoice number 10.528. One invoice reflected the total cost of the goods itemized on the invoice as $23,256 and the other as $38,760. 67. On oraboutDecember9, 1992, caused tobe presented to Customs fraudulent HPH invoice number 10.528, reflecting import costs of $23,256. 68. OnoraboutMarch6, 1993, defendant VICENTE HERNANDEZ-PEREZ caused to be created two versions of HPH invoice number 10.754. One invoice reflected the total cost 13 . Case Document 3 Entered on FLSD Docket 11/25/1997 Page 14 of 35 of the goods itemized on the invoice as $12,384 and the other as $20,630. 69. On or about March 23,1993, defendant LII..LIAM MARTINEZ caused to be presumed to Customs invoice number 10.754, reflecting import costs of $12,384. 70. On or about August 24, 1987, defendant LH..LIAM MARTINEZ spoke with a representative of HPH and contimred that defendant REMEDIOS DIAZ OLIVER's ownership and in Spanish Foods would be concealed. 71. On or about May 14, 1989, defendant LILLIAM MARTINEZ caused to be iiled with the Internal Revenue Service a fraudulent 1988 corporate income tax return, Form 1120, for Spanish Foods, claiming a fictitious commissions deduction of $56,800. 72. On or about March 10, 1990, defendant LILLIAM MARTINEZ issued Spanish Foods check number 1422 payable to for $56,800, as a payment of the fictitious commissions claimed on Spanish Foods' 1988 corporate income tax retum. 73. OnoraboutMay16, 1990, with thelnternal Revenue Service a fraudulent 1989 corporate income tax retum, Form 1120, for Spanish Foods, claiming a fictitious commissions deduction of $126,975. 74. On or about November 22, 1990, defendant FRANCISCO HERNANDEZ-PEREZ 75. InoraboutDecemberof 1990, caused the funds representing the $56,800 fictitious commissions payment from Spanish Foods to HPH which was 14 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 15 of 35 Foods as paid-in capital. . 76. On or about April 22, 1991, defendants LILLIAM MARTINEZ, FRANCISCO HERNANDEZ-PEREZ and VICENTE HERNANDEZ-PFREZ met and planned improvements disguising the source, ownership and control of the funds siphoned from Spanish Foods as the fictitious commissions and the funds obtained from ICEX, through the following: 1) creation of I of the fictitious commissions. I 77. On or about April 30, 1991, defendants FRANCISCO HERNANDEZ-PEREZ and VICENTE HERNANDEZ-PEREZ caused Roster, S.A., to be incorporated in Tortola, British Virgin Islands. 78. In or about May of 1991, defendant CLAUDIO L. MARTINEZ mused six Spanish Foods checks to be prepared and made payable to Hesperides for a total of $156,973.50, as payments of the fictitious commissions expense. 79. On or about May 17, 1991, defendant LILLIAM MARTINEZ caused the six Spanish Foods checks payable to Hesperides totaling $156,973.50 to be sent to defendants FRANCISCO HERNANDEZ-PEREZ and VICENTE HERNANDEZ-PEREZ, as payment of the lictitious commissions expense, with instructions to return the funds to Spanish Foods. 80. On or about June 6, 1991, defendants FRANCISCO and VICENTE HERNANDEZ-PEREZ mused a bank account in name of Roster, S.A., to be opened at Hamilton Bank. 81. On or about June 12, 1991, defendant CLAUDIO L. MARTINEZ mused First 15 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 16 of 35 Royalrock, Inc., to be incorporated in Tortola, British Virgin Islands. 82. In or about June of 1991, defendant FAUSTO DIAZ OLIVER caused Thai Corporation, LTD., a company incorporated in Tortola, British Virgin Islands, to be used in the scheme to disguise the ownership and movemertt of funds from Spanish Foods. 83. On or about July 2, 1991, defendant FAUSTO DIAZ OLIVER caused a bank account for Thai Corporation, LTD., to be opened at Hamilton Bank using fraudulent identifrcation documents and forged signatures. 84. On or about July 5, 1991, defendant CLAUDIO L. MARTINEZ caused a bank account for First Royalrock, Inc., to be opened at Hamilton Bank using fraudulent identification documents and forged signatures. 85. On or about July 13, 1991, defendant LILLIAM MARTINEZ caused to be tiled with the Internal Revenue Service a fraudulent 1990 corporate income tax retum, Form 1120, for Spanish Foods, claiming a lictitious commissions deduction of $172,000. 86. On or about July 18, 1991, defendant FRANCISCO HERNANDEZ-PEREZ purchased eight cashier's checks totaling $156,973.50 at Banco Santander in Spain. 'I\vo of these checks were payable to First Royalrock Corporation, three were payable to Thai Corporation, LTD., and three were payable to Roster, S.A. 87. On or about July 22, 1991, defendant FRANCISCO HERNANDEZ-PEREZ sent defendant CLAUDIO L. MARTINEZ the eight cashier's checks totaling $156,973.50 purchased on July 18,1991, with instructions to deposit the same in the accounts of the three BVI companies. 88. On or about July 31, 1991, defendant CLAUDIO L. MARTINEZ caused the two 16 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 17 of 35 cashier's checks payable to First Royalroek Corporation purchased on July 18, 1991, by defendant FRANCISCO HERNANDEZ-PEIEZ, to be deposited in the First Royalroek Corporation account at Hamilton Bank. 89. On or about August 5, 1991, defendant CLAUDIO L. MARTINEZ issued a personal check, check number- 284, payable to Roster, S.A. for $4,692 to distribute to defendant FRANCISCO HERNANDEZ-PEREZ funds previously diverted from Spanish Foods as payments of the fictitious commissions expense. 90. On or about August 6, 1991, defendants REMEDIOS DIAZ OLIVER and FAUSTO DIAZ OLIVER issued AIC check number 29234 payable to Roster, S.A. for $4,692, to distribute to defendant FRANCISCO HERNANDEZ-PEREZ funds previously diverted from Spanish Foods as payment of the fictitious commissions expense. 91. On or about August 6, 1991, defendant FAUSTO DIAZ OLIVER caused the three cashier's checks payable to Thai Corporation, LTD., purchased on July 18, 1991, by defendant FRANCISCO HERNANDEZ-PEREZ, to be deposited in the 'I`hai Corporation, account at Hamilton Bank. 92. In or about August 1991, defendants CLAUDIO L. MARTINEZ and LILLIAM MARTINEZ caused payments to Spanish Foods from Roster, S.A., and Thai Corporation, LTD., 93. On or about August 27, 1991, defendant LH.LIAM MARTINEZ issued Spanish Foods' check number 2403 payable to Hesperides for $123,601.50, as a payment of the fictitious commissions expense. 94. On or about September 17, 1991, defendant FAUSTO DIAZ OLIVER prepared 17 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 18 of 35 'I`hai Corporation, LTD., check number 1003 for $15,000 payable to Spanish Foods, to return to Spanish Foods funds diverted from the company as a payment of the fictitious commissions expense. 95. On or about September 18, 1991, defendant FAUSTO DIAZ OLIVER prepared 'I`hai Corporation, LTD. check number 1002 for $16,000 payable to Spanish Foods, to retum to Spanish Foods funds diverted from the company as a payment of the fictitious commissions expense. 96. On or about September 24, 1991, defendants REMEDIOS DIAZ OLIVER, FAUSTO DIAZ OLIVER, CLAUDIO L. MARTINEZ and LH.LIAM MARTINEZ and others, met and discussed retuming the funds diverted from Spanish Foods as a payment of the fictitious commissions back to Spanish Foods as loans from shareholders. 97. OnoraboutOctober8, 1991, defendantCLAUDIOL. MARTINEZissuedSpanish Foods' check number 2603 payable to Hesperides for $56,763, as a payment of the fictitious cormnissions expense. 98. In or about November 18, 1991, defendants LILLIAM MARTINEZ and FRANCISCO HERNANDEZ-PEREZ met and discussed the creation of a sham Spanish Foods! Hesperides contract to attempt to legitimize the diversion of funds from Spanish Foods as commissions to Hesperides. 99. On or about January 22, 1992, defendant CLAUDIO UL. MARTINEZ issued Spanish Foods' check number 3237, payable to Hesperides for $100,000, as payment of the fictitious commissions expense. On or about January 31, 1992, defendant LILLIAM MARTINEZ caused $417,173, 18 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 19 of 35 diverted from Spanish Foods as payment of the fictitious commissions expense and returned to Spanish Foods as loans from shareholders, to be recorded on the books and records of Spanish Foods as paid-in capital. . 101. On or about February 24, 1992, defendant FRANCISCO HERNANDEZ-PEREZ prepared Roster, check number 905, payable to Spanish Foods for $49,980, to retum to expense. 102. On or about March 2, 1992, defendant LILLIAM MARTHWEZ caused $99,980, diverted from Spanish Foods as payment of the fictitious commissions expense and returned to Spanish Foods as loans from shareholders, to be recorded on the books and records of Spanish Foods as paid-in capital. 103. On or aboutluly 15, 1992, defendant LILLIAM MARTINEZ caused a fraudulent 1991 corporate income tax retum, Form 1120, for Spanish Foods, claiming a fictitious commissions deduction of $100,500, to be filed with the Internal Revenue Service. 104. In or about August of 1994, def dant FAUSTO DIAZ- OLIVER procured tive false documents from Ernest R. Kew which fraudulently state that Emest R. Kew authorized the tivechecks LTD.'sbankaccounttoretum thediverted funds to Spanish Foods. 105. On or about April 11, 1995, defendant FAUSTO DIAZ OLIVER deceitfully procured a fraudulent affidavit from Emest R. Kew to conceal defendant FAUSTO DIAZ OLIVER's control of the Thai Corporation, LTD.'s bank account at Hamilton Bank. 106. On or about June 28, 1995, defendant CLAUDIO L. MARTINEZ attempted to preventawitnessfrom contro1oftheFirst 19 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 20 of 35 Royalrock, Inc.'s bank account at Hamilton Bank. 107. On or about May 10, 1996, defendant FRANCISCO HERNANDEZ-PEREZ provided to the govemment a sham Hesperides/Spanish Foods contract created to justify the diversion of funds from Spanish Foods as payments to Hesperides. All in violation of Title 18, United States Code, Section 371. (18 U.S.C. ?542) Paragraphs 2 through 14 and 28 though 69 of Count 1 of this Indictment are realleged and incorporated into Counts 2 through 12 of this Indictment as if fully set forth herein. On or about the dates alleged below in each count, in Miami, Dade County, in the Southern District of Florida and elsewhere, the defendant or defendants specified below in each count, did knowingly and understate the true cost of imported merchandise on invoices, declarations, Stateswas deprived oflawtiil duties accruing upon merchandise embraced and referred to in such invoices, declarations, papers and documents, on the dates identified below in each count. @t Date &daat(sl Immctiszm 2 ll/27/90 RemediosDiaz Oliver, Fraudul?1tHPHinvoice 11.930 $33,455.00 Francisco Hemmdu-Perez, rdlectingfalae coats tf $20,073 Lilliam Martine; presented to U.S. Custom; Vic?1teHema?dez-Peru 20 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 21 of 35 Quant Day. Imuaactima 3 12./4/90 Lillian Martinez, Fraudulent JASS invoice 90/000- $101,552.50 Fausto Diaz Oliver 79 costs of $40,161.70 presented to U.S. Customs 4 12/19/90 RemediosDiaz Oliva, Frandul??HPHirnvoice 11.982 $106,475.60 Francisco Hanandaz-Paez, rdlecting false costs of Lillian Matinez, $63,885.36 presumed to U.S. Vicente Hernandez-Perez Customs. 5 3/5/91 Diaz Oliva, Frandulant HPH invoice 12.149 $63 ,626.25 Francisco Hanandcz-Pau, costs of Lillian Marina, $38,175.75 presumed to U.S. Vicente Harnandez-Paez 6 6/14/91 Rancdios Diaz Oliva, Fraudulent HPH invoice 12.373 $28,957.29 Francisco Hernandez-Perez, reilectingfalse costs of $17,374.11 presantedtoU.S. Vicente Hemandez--Perez Customs. 7 8/24/91 Fraudulent JASS invoice $123,226.00 FaustoDiazO1iva $52,563 presumed to U.S. Customs. 8 10/17/91 Lillian Martinez Fraudulent PICO invoice 788 $94,435.00 rdecting false costs of $37,774 presented to U.S. Customs. 9 3/12/92 Rcincdios Diaz Oliva, Fraudulent HPH invoice 10.079 $38,015.00 Francisco Hanandez--Perez, reflecting false costs of $22,809.90 pres?medtoU.S. Vncente Hcrnand??Pau Customs. 10 6/4/92 Diaz Oliva, Fr?ouduler?HPI?{ invoice 10.321 $30,192.50 Francisco Heunandez-Paw, false costs of $18,115.50presentedtoU.S. Vicente Hennandez-Pam Customs. . 1 1 12/9/92 Rcmedios Diaz Oliva, Fraudulent HPH invoice 10.528 $38,760.00 Francisco Hanandez-Paez, reilccting false costs of $23 ,256 Lilliam Marina, presented to U.S. Customs. Vicente Hernandez-Paez 12 3/23/93 Remedios Diaz Oliver, Frandulent HPH invoice 10.754 $20,630.00 Francisco Hernandez-Pau, reflecting false costs of $12,384 Lillian Martina, pesanted to U.S. Customs. Vicente H?nandez?Perez 21 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 22 of 35 In violation of Title 18, United States Code, Sections 542 and 2. . (26 U.S.C. Paragraphs 2 through 14 and 70 through 107 of Count 1 of this Indictment are realleged On or about July 13, 1991, in Miami, Dade County, in the Southern District of Florida, and elsewhere, the defendants, REMEDIOS DIAZ OLIVER, FRANCISCO HERNANDEZ-PEREZ, . LILLIAM MARTINEZ, FAUSTO DIAZ OLIVER, VICENTE did willfully attempt to evade and defeat a large part of the income tax due and owing by Spanish Foods, Inc., totheUnited States ofAmericaforthe?scalyear ended October 31,1990, by preparing and causing to be prepared, and by signing and causing to be signed, a false and Eaudulent U.S. Corporate Income Tax Return, Form 1120, which was Bled with the Intemal Revenue Service on behalfof said corporation wherein it was reported that the taxable income of said corporation for andthatthetotal amountoftax due and owingthereon was the sum ofS1,187.88, whereas as the defendants then and there well knew and believed, the taxable income of Spanish Foods, Inc., for the iiscal year ended October 31, 1990, was substantially inexeess ofthat stated and thatuponthe additional taxableineome a substantial additionaltaxwas due and owing to the United States of America; in violation of Title 26, United States Code, Section 7201 and Title 18, United States Code, Section 2. 22 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 23 of 35 COQQI 14 1 ofthislndictrnentarerealleged On or about Iuly 15, 1992, in Miami, Dade County, in the Southem District ofFlorida, and elsewhere, the defendants, REMEDIOS DIAZ OLIVER, FRANCISCO HERNANDEZ-PEREZ, LILLIAM MARTINEZ, FAUSTO DIAZ OLIVER, VICENTE did williirlly attempt to evade and defeat a large part of the income tax due and owing by Spanish Foods, Inc., to theUnited States ofAmerica for the fiscal year ended October 31, 1991, by preparing afalseandn?audulentU.S. Corporate Income Tax Return, Form 1120, which was Sled with the Intemal Revenue Service on behalf of said corporation, wherein it was reported that the taxable income of said corporation for the said fiscal year was the sum of $76,240 and that the total amount of tax due and owing thereon was the sum of $14,172, whereas as the defendants then and there well knew and believed, the taxable income ofSpanish Foods, Inc., for the iiscal year ended October 31, 1991, was substantially in excess of that stated and that upon the additional taxable income a substantial additional tax was due and owing to the United States of America; in violation of Title 26, United States Code, Section 7201 and Title 18, United States Code, Section 2. 23 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 24 of 35 (18 U.S.C. ?7206(1)) CDLJEJQ Paragraphs 2 through 14 and 70 through 107 of Count 1 of this Indictment are realleged andincorporatedinto Count 15 OnoraboutAugust14, 1992, inMiami,DadeCounty, inthe SouthemDistrict ofFlorida and elsewhere, the defendants, I FAUSTO DIAZ OLIVER, - and REMEDIOS DIAZ OLIVER, residents of Miami, Florida, whom during the calendar year 1991 were married, did williirlly make and subscribe a joint Individual U.S. Income Tax Return, Form 1040, for the calendar year 1991, which was by a written declaration that it was made under the penalties of perjury and was iiled with the Internal Revenue Service, which said income tax retum they did not believe to be true dividend incomeinthe amount of $7,533, whereas the defendants then and there well knew and believed, they received dividend income in addition to that stated on their income tax return; in violation of Title 26, United States Code, Section 7206(1) and Title 18, United States Code, Section 2. Paragraphs2 through 14and70through 107 ofCount 1 ofthislndictmerrtarerealleged Onorabout August 17, 1993, inMiami, Dade County, inthe Southem District ofFlorida and elsewhere, the defendants, 24 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 25 of 35 FAUSTO DIAZ OLIVER, OLIVER, residents of Miami, Florida, whom during the calendar year 1992 were married, did make and subscribe a joint Individual U.S. Income Tax Return, Form 1040, for the calendar year 1992, ofpeijuryandwas iiledwithtlielntuimlkeverme Service, whichsaid did notbelieveto betrue dividend incomeinthe amount of $6,784, whereas the defendants then and there well knew and believed, they received dividend income in addition to that stated on their income tax return; in violation of Title 26, United States Code, Section 7206(1) and Title 18, United States Code, Section 2. I OnoraboutAugust17, 1992, inMhni,DadeCounty, intheSouthernDistrict ofFlo1idaand elsewhere, the defendant, LILLIAM MARTINEZ, a resident of Miami, Florida, did make and subscribe a joint Individual U.S. Income Tax made withthelnternalkevenue Service, which said that the said retum reported dividend income in the amount of $2,565, whereas the defendant then the defendant received dividend incomeinadditionto that stated 25 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 26 of 35 onthe income tax return; in violation of Title 26, United States Code, Section 7206(1) and Title 18, United States Code, Section 2. . Parag1aphs2through 14and70thcugh OnoraboutAugust16, 1993, inMiami, DadeCounty, inthe SouthemDistrict ofFloridaand enewhe-e, me aeremxmt, LILLIAM MARTINEZ, a resident of Miami, Florida, did williirlly make and subscribe a joint Individual U.S. Income Tax Return, Form 1040, furthe calendaryear 1992, declaration that itwas made under the penalties of perjury and was tiled with the Intemal Revenue Service, which said incometaxretumthe defendant did not believeto be true and correct asto everymaterial matterin that the said return reported dividend income in the amount of $2,287, whereas the defendant then thedefendantreceived dividend incomeinadditiontothat stated 26 Case Document 3 Entered on FLSD Docket 11/25/1997 Page 27 of 35 on the income tax return; inviolation of Title 26, United States Code, Section 7206(1) and Title 18, United States Code, Section 2. - A TRUE BILL -- x" THO E. OTT STA ATTORNEY ANGUEIRA SIST UNITED STATES ATTORNEY 27 Cm miftii. SOUTHERN DISTRICT OF FLORIDA UNITED STATES OF AMERICA CASE 1 v. CERTIFIC TE TRIAL Related Case Infomation: SUPERSEDING Yes No .X.. Court Division: (sum om) New Defendant(s) Yes .X. No Number of New Defendants .6.. .X. Miami Kery West Total numberofcounts 4.8. FTP I do hereby certify that: 1. have carefully considered the allegations of the indictment, the number of defendants, the number of probable witnesses and the legal complexities of the attached hereto. 2. am aware that the information supplied on this statement will be relied up by the QQ Judges of this Court in setting their calendars and scheduling criminal trigls under the mandate of the Speedy Trial Act, litle 28 U.S.C. Section 3161. 3. Interpreter: (Yes or No) 7*2 List lan uage andlor dialect jr . 4. This case will take .20.. days for the parties to try. 2 5. Please check appropriate category and type of offense listed (Chockonlyone) (Clxkoriyontdays Petty ll 6 to 10 days Minor 11 to 20 days ..X. Misdem. IV 21 to 60 days Felony 61 days and over 6. Has this case been previously filed in this District Court? (Yes or No) If yes: Judge: Case No. (Attach copy of dispositive order) Has a complaint been filed in this matter'? (Yes or No) lf yes: - Magistrate Case No. Related Miscellaneous numbers: Defendantis) in federal custody as of Defendant s) in state custody as of Rule 20 from the District of 7. This case originated in the U.S. Attomey's oflice prior to August 16, 1985 (Yes or No) - 4 ALE o? UEIRA ASSI 1 ED STATES ATTORNEY Florida . 0716091 *Penalty Sheet(s) attached 00842 ASG Document 3 Entered on FLSD Docket 11/25/1997 Page 29 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA .. . 2 Defendants Name: Count #1 I Conspirapy to evade customs duties and to defraud the 18 U.S.C. 371 *Max. Penalty: Temw of incarceration of up to Hveg5) years; term of supervised release of up to three(3) years; tinenof up to ?250,000; restitution and ?50.00 special assessment. ?n uz Counts 4-6 9-12 5, - Entry of goods by false statement; 18 U.S.*Max Pena as to each count: Term of incarceration of to two 2 ears: te ised :5 release of to a ear fine of to 250 000: restitution and 50.00 ecial a . et Counts #:13 14 Evasion of Corporate Income Tax; 26 U.S.C. 7201 *Max. Penalty as to each count: Term of incarceration of up to tiveg5) years; tenn of supervised release of up to three(3) years; fine of up to $250,000; restitution; cost of prosecution and ?50.00 special assessment. Counts 15 16 Subscribing false individual tax retums; 26 U.S.C. 7206g1) *Max. Penalty as to each count: Tenn of incarceration of not more than three(3) years; temi of supervised release of not more than one(1) year; fine of up to $250,000; restitution; costs of prosecution; and 550.00 special assessment. nav. Case 1:97-cr-00842 ASG ocume 3 Entered on FLSD Docket 11/25/1997 Page 30 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORID 0 4 QAQR - ISTRAT Defendants Name: JUDGE Count I Conspiracy to evade customs duties and to defraud; U.S. 18 U.S.C. 371 *Max Penalty. Tenn of incarceration of up to tlveg5) years; teml of supervised relgg se of 3) EL ii years; line of up to ?250,000; restitution and 550.00 special assessment. lj. Counts 4-6 9-12 Ent of oods false statement :18 U.S.C. 542 *Max. Penalty as to each count Term of incarceration of up to twog2) years; term of supervIsed release of upto a year, fine of upto $250,000; restitution and $50.00 sggial assessment. Counts #:13 14 Evasion of Corporate Income Tax; 26 U.S.C. 7201 *Ma>c Penagy as to each count: Teml of incarceration of up to fivgg5) years; temi of supgised release of up to threeg3] years; line of up to $250,000; restitution; cost of prosecution and $50.00 special assessment. Count *Max. Penagyz Case Document 3 Entered on FLSD Docket 11/25/1997 Page 31 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Defendants Name: 4 2 Count I Conspiragy to evade customs duties and to defraud; U.S. 18 U.S.C. 371 *Max Penalty: Tenn of incarceration of up to five(5) years; temt of supervised release of thgg(3) years; nne of up to ?250,000; restitution and 550.00 special assessment. Elf? fj f2 Q4 Counts #:2-12 I En of oods false statement 18 U.S.C. 542 ifi; J5 *Max Penalty as to each count: Term of incarceration of up to two(2) years; term of supervised release of up to a year, fine of up to ?250;000; restitution and ?50.00 special assessment . Counts#:13 14 Evasion of Corporate Income Tax; 26 U.S.C. 7201 'Max. Penalty as to each count: Term of incarceration of up to fiveg5) years; term of supervised ao?on r? o??o :o?n oo.oo`. special assessment. Counts #:17 18 Subscribing false individual tax retums; 26 U.S.C. 7206(1) *Max. Penaly as to each count: Term of incarceration of not more than three(3) years; term of supervised release of not more than one(1) year; Ene of upto $250,000; restitution; costs of prosecution; and ?50.00 special assessment. nav. Case Document 3 Entered on FLSD Docket 11/25/1997 Page 32 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA 0 8 CR - GOLD Defendants Name: 4 2 MAGISTRATE JUDGE Count I Consgiragy to ev de customs duties and to defraud; U.S. 18 U.S.C. 371 *Max Penalty: Tenn of incarceration of ug to 1ive(5) years; tenn of sugervised release of three(3) years; fine of ug to ?250,000; restitution and ?50.00 sgecial assessment. Count I Emi cx: *Max. Penal II Count za *Max. Penaly: Count *Max. Penalty: Case 1:97- -0 cr 0842-ASG Document 3 ntered on FLSD Docket 11/25/ 1997 33 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Defendants Name: I GISTRATE Count Cons ira to evade customs duties and to defraud 18 U.S.C. 311 *Max Penagy: Temt of incarceration of gp to tiveg5) ygars; term of supervised release of threeg3) ears?1ine of to 250 000: restitution and 50.00 ecial assessment. Counts Entry of goods by false statement; 18 U.S.C. 542 *Nlax. Penalty as to each count: Term of incarceration of up to twog2) years; tenn of supervised - release of up to a year, line of up to ?250,000; restitution and 550.00 special as?`e?ssmenT' count #:13 s. 14 jj 5 Evasion of Co orate income Tax? 26 U.S.C. 7201 Z1 sti (A *Max. Penal as to each count: Term of incarceration of to tive 5 ars? term of@ ised oo:oo I o'.onoo . special assessment. Counts 15 18 Subscribing false individual tax retums; 28 U.S.C. '/206?1) *Max. Penalty as to each count: Term of lncareeratiefl of not more than three?3) years; term of sugrvised release of not more than onegt) year, fine of up to $250,000; restitution; costs of rosecution? and 50.00 ecial assessment. av. umm . ase Doc umem 3 Enter ed on FLSD Docke age 34 of 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Detendahfa Namei Count Cons ire to evade customs duties and to defraud U.S. 18 U.S.C. 371 *N\ax. Pena 1 Term of incarceration of totive 5 ears? term of su ervised reiease of three 3 years; hne of up to $250,000; restitution for each count and ?50.00 sgeciai assessment. Counts #12, 4-6 9-12 Entg of goods by faise statement; 18 U.S.C. 542 *Max. Pena as to each count: Term of incarcerahon of to two 2 ears? temvef su rvi reiease of to a ear fine of to $250 000? restitution and $50.00 eciai . gif Counts #113 14 2; Evasion of Co orate income Tax? 28 1201 ff gg; G: cs *Max. Penai as to each count: Term of incarceration ot to tive 5 ears term ot su Sivised reiease of to three 3 ears? tine of to 250 000? restituuon costs ot rosechon 50.00 sgeciai assessment. Count #1 "Max. Penaigz Case Document 3 Entered on FLSD Docket 11/25/1997 Page 95:5:99