President and Owner of Former Massachusetts Company Sentenced for Conspiracy and Making False Statements, Reports U.S. Attorney

22 October 2005

The President and part owner of Stealth Components, Inc., of New Hampshire, formerly based in Newburyport, Massachusetts, was sentenced today in federal court in connection with a scheme to avoid paying over $385,000 in U.S. Customs import duties.

United States Attorney Michael J. Sullivan and Robin M. Avers, Special Agent in Charge of the Immigration and Customs Enforcement in New England, announced that BERNARD SMITH, age 33, of 28 Winterberry Lane, Stratham, New Hampshire, was sentenced by U.S. District Judge Douglas P. Woodlock to 3 years of probation, the first 4 months of which are to be spent in community confinement, to be followed by 8 months and 1 day in home detention with electronic monitoring. SMITH was also ordered to pay a $30,000 fine. In May of this year, SMITH pleaded guilty to a seven-count Indictment charging him with Conspiracy and False Statements.

At the earlier plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that Stealth Components, Inc. ("Stealth"), is in the business of purchasing electronic components that it imports from overseas countries for resale in the United States. At the time of the offenses, Stealth was located in Newburyport, Massachusetts.

SMITH admitted that from November of 1998 through May of 2000, he and others participated in a scheme to defraud U.S. Custom's in order to minimize the payment of antidumping duties that Stealth was required to make on imported Korean Dynamic Random Access Memory ("DRAM"). In 1993, the U.S. Department of Commerce determined that DRAM imports from certain Korean companies were being sold at less than fair market value. As a result, the U.S. Department of Commerce instructed Customs to collect antidumping duties on certain Korean DRAM. Thereafter companies that imported qualifying Korean DRAM were required to deposit antidumping duties with Customs for each shipment at the time of its entry into the United States.

The scheme involved the presentation of false and fraudulent invoices to Customs that undervalued the purchase price and falsely described the Korean DRAM that Stealth imported in order to lessen the cash payment amount for antidumping duties that Stealth was required to make to Customs.

SMITH perpetrated this scheme by directing foreign suppliers to prepare fraudulent invoices and other false entry documents that would be presented to Customs at the time of entry for each shipment of DRAM that Stealth imported. Over the course of this scheme, SMITH avoided the total payment of over $385,000 to Customs in antidumping duties that Stealth was required to deposit on shipments of Korean DRAMS.

The case was investigated by Special Agents with Immigration and Customs Enforcement. It was prosecuted by Assistant U.S. Attorney Carmen M. Ortiz in Sullivan's Economic Crimes Unit.

Source: PR Newswire

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