On September 11th, 2023

Los Angeles County Man Sentenced in Tax Evasion and Counterfeit Apparel Scheme

“Schemes such as this cheat consumers and work against California’s economy.  We applaud the team of investigators who carried out a search operation of the business, seized the counterfeit items, investigated the tax returns of this individual, and assisted prosecutors.” – CSLEA President Alan Barcelona

LOS ANGELES – On September 7, 2023, California Attorney General Rob Bonta announced the sentencing of Eyal Dahan, a Los Angeles County businessman who pleaded guilty to tax evasion and counterfeiting charges. Through his company Cavalier Closeouts, Inc., Dahan traded in counterfeits of well-known clothing brands and filed false tax returns that hid his earnings and operations. Dahan paid more than $580,000 in restitution and received a two-year suspended sentence. The prosecution in this case was carried out by the California Department of Justice (DOJ).

“Today’s sentencing is a result of exceptional work done by DOJ’s legal and investigative teams, and our partners in local, state, and federal agencies. Let this be a strong warning: The California Department of Justice will not hesitate to take action against bad actors who harm California’s consumers or endanger its communities,” said Attorney General Bonta.

In October 2018, investigators with DOJ and other federal, state, and local law enforcement agencies carried out a search operation on the Los Angeles location of Dahan’s company, Cavalier Closeouts, and seized more than 121,600 items of apparel bearing counterfeit trademarks registered to clothing brands Adidas, Columbia and Vans. Investigators also found that between October 2015 and June 2019, Dahan filed false tax returns in which he failed to report more than $1.1 million in wages or pay over $59,000 in payroll taxes for employees at his company Cavalier Closeouts.

Dahan pleaded guilty to multiple felony charges, including counterfeiting of a registered trademark, and filing a false tax return. On September 7th at the Los Angeles County Superior Court, Dahan paid $586,438.20 in restitution and was placed on two years' formal probation and required to complete 90 days' community service as part of his sentence.

The seizure and convictions were the result of an investigation by members of the Tax Recovery in the Underground Economy (TRUE) Task Force, which is made up of members of DOJ, the California Employment Development Department, the California Franchise Tax Board, the California Department of Tax and Fee Administration, the California Department of Insurance, the Internal Revenue Service, and Homeland Security Investigations. The TRUE Task Force investigates and prosecutes economic crimes in the underground economy, including wage theft, tax evasion, counterfeiting and piracy, money laundering, labor trafficking, and the sale of black-market drugs, among other crimes. The task force consists of attorneys, investigators, and special agents from the member agencies. You can find more information about it at https://oag.ca.gov/bi/true.

A copy of the criminal complaint in this case can be found here.


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