Attorney General Becerra, California Labor Commissioner’s Office File Charges Against Operators of Underground Garment Shop Licensing Scheme

SACRAMENTO – California Attorney General Xavier Becerra and the California Labor Commissioner’s Office today announced the filing of criminal charges against Jong Min Ju (Ju) and his co-conspirators, as well as the arrest and arraignment of Irene Park (Park) for an alleged illegal garment shop licensing scheme. In the criminal complaints, Attorney General Becerra alleges Ju and his co-conspirators engaged in 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. Fraudulently licensed garment shops undermine the State of California’s ability to protect garment workers from wage theft and unsafe working conditions.

“With these criminal charges, we’re putting the underground garment shop industry on notice,” said Attorney General Becerra. “Our office is here to stop those who facilitate the exploitation of workers for a cheap buck. If we are to thrive as a state and nation, the American Dream cannot be just a dream for workers striving to make an honest living.”

“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 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.

These arrests build on Attorney General Becerra’s efforts to protect the rights of workers across California. Earlier this month, the Attorney General’s Worker Rights and Fair Labor Bureau filed a petition in the Ninth Circuit Court of Appeals opposing the Federal Motor Carrier Safety Administration’s attempt to undermine California’s meal and rest breaks. In January, the California Department of Justice joined a multistate comment letter opposing a National Labor Relations Board proposal that would diminish protections for millions of workers. Attorney General Becerra also co-led a coalition of 17 Attorneys General opposing a Trump Administration rule to allow employers to pocket the tips of certain employees, threatening up to $5.8 billion of workers’ earned tips. In November 2017, Attorney General Becerra filed a lawsuit against One Source, a janitorial subcontracting company based in Orange County, to protect janitorial workers in retail establishments all over California from wage theft.

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.

State law requires every person, including wholesalers, contractors, and subcontractors, engaged in the garment manufacturing industry to register with the Labor Commissioner and take an exam. There are currently 3,203 garment contractors and manufacturers legally registered to operate in California. The registration applicant must pass an exam to assess the applicant's knowledge of basic labor and health and safety laws before being permitted to start garment manufacturing operations. Garment manufacturers found to be operating without proper registration may have their garments or apparel confiscated by the Labor Commissioner.

A copy of the complaints filed with the court can be found here. The declarations in support of the arrest warrants can be found here.

It is important to note that criminal charges are only allegations against a person. Every defendant is presumed innocent unless or until proven guilty.