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Cough Up the Blue Jeans

SAN DIEGO (CN) - A Los Angeles businessman on Monday was sentenced to 27 months in federal prison - and to surrender 220,000 pairs of blue jeans - for evading Customs duties on $30 million in Chinese-made clothing.

Sunil Jiwat Mirwani, 39, also must forfeit more than $30,000 in cash from his Hong Kong bank account. The blue jeans are valued at more than $1 million, the U.S. Attorney's Office said in a statement announcing the sentence.

Mirwani's company, M Trade, was sentenced to five years of probation.

Mirwani falsely marked his smuggled goods as "in bond," meaning they were to be transshipped from the Port of Long Beach to Mexico. But he and his conspirators then "forged documents and falsified database entries" and sent them to L.A.-area warehouses, prosecutors said in the statement.

"Mirwani would then sell his jeans, shorts and skirts throughout the United States effectively tax-free. In this way, Mirwani could sell more jeans at cheaper prices than his law-abiding competitors - including domestic American manufacturers of similar goods who, unlike Mirwani, could not rely on cheap Chinese labor to keep costs low," the U.S. attorney said.

A jury convicted Mirwani and M Trade in June this year.

According to the U.S. attorney: "Mirwani and M Trade ... were just two of 11 defendants charged in July 2012 as part of a larger conspiracy to fraudulently import foreign-made textiles, cigarettes, snack foods, and Salmonella-infected produce. In the past year, several other defendants have pled guilty and been sentenced for their role in the scheme, including Gerardo Chavez, the former president of the San Diego

Customs Brokers Association, who is currently serving a 37-month prison sentence. Two defendants - Joel Erasmo Varela Gonzalez and Jose Porter - are fugitives and remain at large."

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