Ralph Olarte, the CFO of the Los Angeles-based freight forwarding company Sport LA, was arrested last week in connection with a sweeping federal indictment that accuses multiple executives of smuggling billions of dollars’ worth of goods from the U.S. and into Mexico, as well as laundering the proceeds through U.S. banks.
Olarte was snagged by law enforcement at Los Angeles International Airport, according to federal prosecutors. CEO Humberto Lopez Belmonte is also facing charges in the 22-count indictment that alleges a multi-year conspiracy to falsify export documents, bribe Mexican officials and cartel members alike and avoid paying hundreds of millions of dollars in customs duties.
Olarte and his co-defendants are accused of using shell companies to move fraudulent invoices around to conceal the true recipients of shipments exported from the U.S. to Mexico. The feds say the defendants submitted falsified documentation to U.S. Customs and Border Protection, including bogus certificates suggesting Mexican import taxes had been paid.
The indictment goes on to accuse both Olarte and Belmonte of paying bribes to customs officers in Mexico as well as kickbacks to members of the Jalisco New Generation Cartel in exchange for protection and cooperation. The operation, which federal agents say started from “at least 2013,” involved bulk cash smuggling and international money laundering through a network of American bank accounts.
Sport LA’s business revolved around being a bonded freight carrier, operating under the names H&R Logistics and HRL. It has been charged with making false statements to a government agency. Olarte Transport Service, also named in the indictment, played a role in the broader operation. The companies’ roles in transporting goods under customs control may have helped them move shipments while submitting falsified export documents. Prosecutors allege that fraudulent paperwork and false certifications were key elements of the scheme.
Prosecutors allege the scheme generated millions in illegal profits for Olarte and Lopez. If found guilty, each could face up to 20 years in federal prison for charges tied to wire fraud and money laundering. Additional penalties include a maximum of five years per count for smuggling and making false statements, and up to two years per count for submitting inaccurate export data to federal authorities.
