Garment fraud stitched up
US CUSTOMS officials have broken a multi-million-dollar international textile fraud involving two Hongkong trading companies falsely labelling garments as produced in Mongolia, to get past quota regulations.
The companies, one of which admitted its part in the scam to Mongolian and US officials, exported thousands of Chinese-produced sweaters under ''false claims of Mongolian origin'' to the US.
The fraud came to light following the first visit to the remote central Asian country by Customs officials from Hongkong and the US last month.
In an official document put together after the trip, US officials identified one of the companies and stated that more than US$2 million (HK$15.6 million) of the garments were falsely labelled.
''The management of Wong's International Company Ltd attempted to deceive both US and Mongolian officials during the Customs visit, and only through the persistent efforts of Mongolian officials, and as a result of the honesty of the firm's Mongolian employees the deceptions were unmasked,'' the report said.
US officials believe Mongolia, which only produces small amounts of manufactured goods, was being used as a cover for over-production in the mainland.
As a result of the operation US Customs and Mongolian Government officials have entered into informal arrangements in an attempt to stop the abuse.
US Customs officials have declined to comment, saying the case is still under investigation, and no one from Wong's could be contacted yesterday.
