Carlos Djemal, 52, Charged in $100M VAT Fraud Scheme

Carlos Djemal, 52, of Chicago, Illinois, is behind bars facing federal charges tied to a brazen $100 million international money laundering and wire fraud scheme that exploited Mexico’s value-added tax (VAT) refund system. Alongside Isidoro Haiat, Braulio Lopez, Max Fraenkel, Daniel Blitz, and Robert Moreno, Djemal allegedly orchestrated a years-long fraud that turned outdated cell phones into a cash machine for criminal enterprise.

The scheme, which ran from June 2011 through at least May 2016, relied on a web of shell companies—dubbed ‘Front Companies’—set up across Mexico and the United States. These companies, falsely posing as importers and exporters of cellular phones, were used to file fraudulent VAT refund claims with the Mexican government. The fraud hinged on artificially inflating the value of outdated phones exported from Mexico, triggering larger tax refunds than lawfully permitted.

According to the unsealed complaint in Manhattan federal court, Djemal and Haiat directed Mexican front firms to purchase obsolete phones from companies clearing inventory. Those phones were then shipped to U.S. fronts controlled by co-conspirators Lopez, Fraenkel, Blitz, and Moreno. Fraudulent invoices and doctored export documents inflated the devices’ worth, allowing the group to claim exaggerated VAT refunds from Mexican tax authorities.

But the scam didn’t end at the border. Once in the U.S., the phones were shuffled in a circular loop—shipped back to different Mexican front companies and re-exported again, each time generating another fraudulent refund. This rinse-repeat cycle turned low-value electronics into millions in illicit payouts, exploiting loopholes in international trade and tax law to funnel over $100 million through U.S. banks.

Djemal was arrested in Chicago; Fraenkel in Austin, Texas; and Moreno in Dallas. Blitz will appear this afternoon in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck. Haiat and Lopez remain at large. All six are charged with international money laundering, wire fraud, and conspiracy to commit both crimes.

‘As alleged, Carlos Djemal, Isidoro Haiat, and their co-defendants used the U.S. banking system to commit an international fraud scheme that deprived the Mexican government of substantial tax revenue and involved the laundering of over $100 million,’ said Manhattan U.S. Attorney Preet Bharara. ‘Thanks to the outstanding investigative work of HSI and the IRS, these alleged criminals will now face charges in an American court.’