On February 26th, 2019

Labor Commissioner’s Criminal Investigations Unit Uncovers Fraudulent Garment Licenses Ring

SACRAMENTO – On February 25, 2019 the California Attorney General and the California Labor Commissioner’s Office announced the filing of criminal charges against Jong Min Ju and his co-conspirators, as well as the arrest and arraignment of Irene Park for an alleged illegal garment shop licensing scheme.  According to the criminal complaints, Ju and his co-conspirators allegedly operated a scheme to defraud the Labor Commissioner’s Office into issuing garment shop registration licenses to garment contractors, who would otherwise be ineligible due to past labor violations, unpaid taxes, or other problems.

“Operating with a fraudulent license contributes to the underground economy in which businesses fly under the radar when it comes to working conditions, wages, taxes and workers’ comp insurance,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “If you read the complaints filed with the court (here) and the declarations in support of the arrest warrants (here) you’ll get an idea of the work state investigators do to uncover these criminal acts.  It’s a lengthy and complicated investigation.”

“The Labor Commissioner’s Criminal Investigations Unit was instrumental in uncovering this criminal fraud ring to obtain garment licenses,” said California Labor Secretary Julie A. Su. “Sweatshop operators who use fraud to game the system, commit crimes that hurt law-abiding competitors and undermine the entire purpose of garment licensing, which is to verify that employers in the industry are honest businesses who know and respect California labor laws. Each felony charge from this joint investigation proves that we will use our resources to crack down on schemes that provide unjust economic advantages over businesses owners who play by the rules and we will do everything in our power to clean up the industry.”

The criminal complaints stem from a joint investigation, launched in 2015, by the California Department of Justice’s Worker Rights and Fair Labor Bureau and the California Labor Commissioner’s Criminal Investigation Unit. As a result of the investigation, the California Department of Justice charged Ju with 44 total felonies, in three separate criminal complaints, for conspiring to file garment registration applications using false identities and paying individuals to take the mandatory garment registration exams under the guise that they were the actual contractor. As part of these criminal activities, Ju allegedly obtained the services of “name lenders,” individuals who illegally allow for the use of their name and other identifiers in exchange for payment. Ju’s co-conspirator, Park, allegedly then filled out and processed the garment registration applications using these false names. Park allegedly conducted these activities from the Korean American Garment Industry Association, a Los Angeles-based trade group for garment contractors, where she was an employee. An arrest warrant has been issued for Ju who is currently at large. Anyone with information about his whereabouts is asked to contact the California Labor Commissioner’s Criminal Investigation Unit at (818) 901-5305.

Historically, the garment industry has had one of the highest rates of minimum wage and overtime violations in Southern California, where Ju and his associates allegedly operated their scheme. In a survey conducted by the U.S. Department of Labor in 2016, 85 percent of garment shops surveyed in Los Angeles and Orange Counties failed to pay the federal minimum wage and/or mandatory overtime pay. In California, the garment industry employs tens of thousands of workers, many of whom are female immigrants, to sew, press, trim, and package the clothing that eventually ends up in retail stores.

The Labor Commissioner’s Criminal Investigation Unit, which is comprised of sworn peace officers, investigates workers’ compensation violations, felony or misdemeanor wage theft, payment of wages with bounced checks or other insufficient funds, unlicensed farm labor contractors and garment manufacturers, kickbacks on public works projects, violations involving minors on the job, and obstructions of Labor Commissioner investigations.

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