Thinking Outside the Box
CBP’s Fines, Penalties, and Forfeitures Division ensures the safe and secure storage of all goods seized by the U.S. government. Above, two CBP seized property specialists observe as illegally harvested plywood is stored in a Miami warehouse. Photo by Gary Gillard
It all started with an anonymous tip. The seed blossomed and, ultimately, became an amazing example of an enforcement action with a novel twist. Rather than taking the traditional route of destroying nearly 2,300 pallets of seized, illegally harvested plywood, which were deceptively transshipped to the U.S. through a variety of countries, an innovative Fines, Penalties, and Forfeitures team at U.S. Customs and Border Protection’s Miami Field Office, came up with a way to give back to American communities and save taxpayers millions of dollars. But it was only possible because of partnerships.
The tip arrived in April 2018 as an e-Allegation, CBP’s online reporting mechanism for suspected trade violations. Two South Florida companies were identified for possible duty evasion. The importers were selling hardwood plywood too cheaply and undercutting U.S. competitors. CBP’s National Threat Analysis Center in Miami researched the claim and suspected the plywood was being imported from China with a false country of origin to avoid paying duties. In December 2017, the combined duty rates for importing hardwood plywood from China rose sharply from 8% to 206.34% to offset unfair low prices and foreign government subsidies. The National Threat Analysis Center noticed that around that time a high volume of plywood shipments had suddenly emerged from new source countries while exports from China were drastically diminishing.
The case was referred to Homeland Security Investigations, HSI, and in July 2018, an investigation was launched. That month, two shipments of plywood from Panama were flagged by CBP at the Port Everglades seaport in Fort Lauderdale, Florida. The importer had declared that the plywood was from Panama, but upon inspection, CBP and the HSI investigator discovered that the container had a seal on it from China. “If the importer had purchased the plywood from Panama, the seal on the container would have been from Panama,” said HSI Special Agent Lyndon George, the lead investigator on the case. “Furthermore, when we opened the container, there were no country of origin markings on the wood. Whenever goods are imported into the U.S., they need to show where they came from.” CBP seized both shipments because of the violations.
As Special Agent George investigated the case, a lot of things didn’t add up. For example, the importers declared a type of wood that didn’t grow where they said it did. “They said the wood, a Brazilian pine, Araucaria angustifolia, came from Russia, but that type of wood doesn’t grow in Russia,” explained George. “There are only two or three countries in South America where it grows. Based on that, we believed we had probable cause for a search warrant of the importers’ warehouse to see what their business records would reveal.”
The execution of the search warrant was slowed down by the pandemic, but it gave the investigator time to review documents. “From March to September 2020, I reviewed thousands and thousands of documents,” said George. He discovered that the importers were changing their operation of how they brought the wood in. “They had numerous fictitious shell companies with virtual offices. As soon as one would disappear, three or four others would pop up. The addresses were different, but it was the same people.”
A search warrant was executed on Jan. 7, 2021. “The records we obtained proved the importers were getting their product directly from China, not Malaysia, Singapore, Panama, Brazil, and all of the other countries they were transshipping the plywood through,” said George. On Jan.12, five days after the search warrant was executed, the importers, Noel and Kelsy Hernandez Quintana, a married couple who lived in Florida, fled the country.
Over the course of the investigation, CBP and HSI seized 28 shipments of plywood that arrived at Port Everglades and the Miami seaport. While investigating, HSI also uncovered and seized plywood from previous shipments the Quintanas had stored in a local warehouse in Medley, Florida, 10 miles northwest of Miami. Altogether, the shipments totaled nearly 2,300 pallets, a massive amount of plywood that the importers had grossly underpaid duties on.
Seized plywood
The seized plywood was taken into custody by CBP’s Fines, Penalties, and Forfeitures Division in Miami for storage. “The Fines, Penalties, and Forfeitures Division is responsible for providing the back-end work that protects government revenue as well as safeguarding seized items such as narcotics; other potentially harmful, illicit goods; and violative merchandise including this plywood,” said Robert Del Toro, the Fines, Penalties, and Forfeitures officer for CBP’s Miami/Tampa Field Office. “After goods are seized or a violation is found, we follow a strict process with time frames to ensure that actions are fair to the public.”
The plywood went through the forfeiture process. A paralegal assigned to the case notified all parties of interest that their property was seized by the federal government. “The notice explained the violations and the violators’ rights and options,” said Amelia Castelli, the Fines, Penalties, and Forfeitures deputy officer for CBP’s Miami/Tampa Field Office. “Violators can abandon the goods, ask for an administrative review, or they can request that the matter be referred to the U.S. Attorney to commence judicial forfeiture proceedings.”
The forfeiture process went fast. The majority of shipments were forfeited to the U.S. government in two-and-a half months. “No one claimed the property,” said Castelli.
At that point, the plywood needed to be discarded. The seized shipments were stored at the government’s expense in four contracted warehouses throughout South Florida. “When property is seized, our mindset is: ‘How do we get rid of this to cut costs?’” explained Castelli. “Our goal is to move property quickly to get it out of the government’s custody and save taxpayers money.”
But the plywood was a conundrum. “Usually Fines, Penalties, and Forfeitures destroys forfeited goods or tries to sell them to offset seizure and storage costs, but in this case, we couldn’t sell it,” said Castelli. The plywood was illegally imported and covered by the Lacey Act, a conservation law that prohibits trade in wildlife, fish, and plants that have been illegally taken, possessed, transported, or sold. “Our only option, which wasn’t a good one, was to destroy the plywood,” said Castelli. “If we destroyed the plywood, typically done by incineration, it would waste perfectly good wood, and cost taxpayers hundreds of thousands of dollars or potentially millions on top of the storage fees.”
The U.S. Department of Justice’s Environmental Crimes Section, which was prosecuting the case, came to the same conclusion. “We talked about what to do with the wood. We don’t sell timber that has been seized for a host of different reasons. So that left destruction or donation,” said Elinor Colbourn, senior counsel for the U.S. Department of Justice’s Wildlife Programs Environmental Crimes Section. “We explored ways to donate because it was just incredibly wasteful to destroy that volume of plywood. We then raised the question with CBP and made the suggestion. Amelia took it, ran with it, and made it possible.”
But there were stipulations for donation recipients. “We wanted to ensure that there was never a question of violating the Lacey Act,” said Colbourn. “Those receiving the plywood could not sell it or transport it interstate.” In turn, the Department of Justice provided assurance that donation recipients would not be referred for prosecution. “Nobody would go after them for receiving donated wood and putting it to good use,” said Colbourn.
A challenging donation
However, donating the plywood proved to be a challenge. At first, Castelli decided to reach out to local charities. “I thought it would be wonderful to donate to our local area,” she said. Castelli even thought she could give all of the plywood to the local chapter of Habitat for Humanity, a nonprofit that builds affordable housing. But she soon learned that was totally unrealistic. “The first couple of charities I approached didn’t want it,” she said. “They told me that here in South Florida we have a strict building code because of hurricanes and they couldn’t use interior grade plywood like this on the exterior of homes.” So Castelli cast her net further and contacted Habitat for Humanity’s headquarters. A national solicitation was sent out throughout the U.S., but only four requests came back for a total of 22 pallets. Castelli was shocked. “I never would have envisioned it would be so difficult to donate something,” she said.
Castelli had to figure out what to do next. “I didn’t want to throw my hands up in the air and just give up. This was very, very good plywood and I didn’t want to destroy it.” That’s when she came up with the idea of contacting the Federal Emergency Management Agency, FEMA. Castelli knew the agency was the arm of the government that dealt with disaster recovery efforts. Furthermore, it was part of the Department of Homeland Security. Castelli did a random online search and found an address for FEMA donations. She drafted an email and sent it. “I thought maybe they would just take the plywood, but that’s not how it works,” said Castelli. “FEMA has a huge network of state and local charitable organizations that they partner with for disaster relief efforts.”
When Castelli heard back from FEMA, she discovered that CBP’s massive plywood donation was not the norm. “The emergency management specialist who responded to me was in disbelief,” said Castelli. “He wanted to know if I was serious. He told me that FEMA didn’t get donations like this, especially from the government. I let him know I was extremely serious.”
From there, a full-blown partnership was forged. FEMA blasted out multiple messages about the available plywood to charities and state-run voluntary disaster recovery organizations within their network across the country. The response was remarkable. Ultimately, 25 FEMA-sourced charities, which were further reviewed and approved by CBP’s Fines, Penalties, and Forfeitures Division, received donations to rebuild homes destroyed by hurricanes, tornadoes, fires, and floods throughout the nation. “Leveraging our partners at FEMA allowed us to reach a large number of charitable organizations quickly,” said Del Toro. Furthermore, the plywood donations saved hundreds of thousands of dollars in disaster relief funds. “We never would have been able to do this without FEMA. We were a team and we made this happen,” said Castelli.
Helping communities hit by disaster
One of the charities, the Mennonite Disaster Service, built cabinets with the plywood. Founded in 1950 in Hesston, Kansas, the Mennonite Disaster Service is an Anabaptist, volunteer network that assists people affected by disasters in North America. “Our organization primarily builds or repairs homes for folks after a disaster, but we have this little subgroup that builds kitchen cabinets,” said Matt Troyer-Miller, a regional operations coordinator for the Mennonite Disaster Service. “We focus on the uninsured, the underinsured, vulnerable families who wouldn’t be able to recover on their own. They wouldn’t have the resources to do it.”
The cabinets, which are provided to homeowners at no cost, were built at the Mennonite Disaster Service’s cabinet shop in Goessel, Kansas. “We have 20-25 volunteers who come in a couple days a week from September to May to build cabinets,” said Troyer-Miller. “Most are retired guys who want to help serve in some way.”
The craftsmanship and quality of the cabinets are excellent. “These are not low-end, middle-of-the-road cabinets made with particle board. We are providing high-quality, solid wood cabinets that you would buy from a custom cabinetry place,” said Troyer-Miller. “This is the highest grade plywood; the nicest wood you can buy.”
The cabinets, built with the donated plywood, were installed in homes destroyed by tornadoes, hurricanes, and floods in Texas, Kentucky, Florida, Maryland, and other areas throughout the country. “We partner with local communities that identify families that need help after a disaster,” said Troyer-Miller. In Maryland, the Mennonite Disaster Service works closely with the Eastern Shore Long-Term Recovery Committee, a community disaster relief organization that was established to help people on the Eastern shore of the Chesapeake Bay recover from flooding and wind damage after Hurricane Sandy struck in October 2012. “Most people don’t realize that this part of Maryland, the Chesapeake Bay, is a flood zone,” said Kimberly Hopkins, the disaster recovery program coordinator for the Eastern Shore Long-Term Recovery Committee. “There’s recurring flooding of people’s homes so it’s in everyone’s best interest to mitigate the hazard from happening in the first place.”
Hopkins surveyed the area and identified Hazel Cropper, an 86-year-old homeowner in the coastal town of Crisfield, Maryland, as being a good candidate to have her home rebuilt. The home had flooded repeatedly over the years because of high tides and hurricanes. On several occasions, the Coast Guard needed to rescue her. “The flooding had happened so many times the house was in irreparable condition,” said Hopkins.
Cropper, a Crisfield native and a world-renowned champion crab picker, had lived in her home for 58 years. “The house was over 100 years old when I bought it. It was an old hardware store. My husband and I fixed it up and converted it into a home,” said Cropper, who raised her children, grandchildren, and great grandchildren in the house. “The flooding wasn’t bad when we first moved in, but over the years, the tide grew higher. The land is low and when it rains steady and hard, it comes up over the sidewalk and into the house.”
Cropper’s home is one of 11 new, elevated homes that were rebuilt in the area by the Mennonite Disaster Service. Each has kitchen cabinets made with the donated plywood. “When I opened the door and stepped into my new house, I didn’t know what to expect,” said Cropper. “My eyes landed on the cabinets and I was swept off my feet. I just love the maple color. They are a perfect match with my chairs and much sturdier than my old cabinets. It was a beautiful surprise and I am very happy. I loved my old house, but thank God I’m very much in love with the new one.”
Rebuilding destroyed homes
The Hopeful Restoration Group, based in Longs, South Carolina, is another nonprofit charity that received the donated plywood. The charity and its outreach arm, Spokes of Hope, were created after Hurricane Florence hit Horry County, South Carolina, in September 2018, and nearly 3,000 homes in the area were flooded. FEMA and disaster relief organizations throughout the country came to the county’s aid, inspiring Shane Zoccole, the charity’s founder and director, to help others victimized by natural disasters.
Spokes of Hope used the plywood to rebuild homes destroyed by tornadoes, hurricanes, and floods in Kentucky, Florida, Alabama, Louisiana, Oklahoma, Tennessee, North Carolina, and Texas. “The plywood was a miracle. It helped thousands of people,” said Zoccole. “When we pull into towns after a storm has just hit, the people are broken. It’s not just the loss of a roof over their head or the things they’ve treasured, their lives are turned upside down,” he said. “The plywood brought hope to towns. It’s valuable. It’s high-end, cabinet grade plywood that costs $98 a sheet. When we gave someone 50 sheets of plywood to rebuild their home, we were handing them thousands of dollars. That is hope. These people didn’t have money to rebuild or repair their homes, and then all of a sudden, they can put a floor in their house, or walls, or replace a roof that has big holes in it.”
“What started as something bad turned into rebuilding homes across America,” said Zoccole. “We could have lost all of this wood because of the legal restrictions. And Amelia could have just not wanted to deal with this. There’s a lot of organizing and paperwork involved and the donations need to be procured in just the right way. But Amelia and her team made this happen. They helped thousands of people because of what they did. The plywood was a blessing. It went to the people who needed it the most.”
Criminal enforcement
In April 2021, the two main targets of the investigation, Noel and Kelsy Hernandez Quintana, were indicted. Through record searches, Special Agent George suspected the couple might have fled to Montenegro in Southeastern Europe. His suspicions were confirmed by Interpol and the Quintanas were arrested in June 2021 at the Montenegro international airport in Podgorica, 30 minutes before boarding a flight to Cuba. The couple was extradited back to the U.S. on Oct. 26, 2022, and taken into custody by the U.S. Marshals Service. One year later, on Oct.19, 2023, the Quintanas pleaded guilty.
On Feb. 14, 2024, the couple was sentenced to serve 57 months in prison for illegally importing and selling plywood products that violated the Lacey Act and customs laws. The plywood, valued between $25 million and $65 million, was intended to be sold to the plywood industry in South Florida. In addition to their prison sentences, the Quintanas were ordered to pay over $42 million in forfeitures and more than $1.6 million in storage costs. Following their prison sentences, the couple will be supervised for three years and prohibited from importing and exporting products protected by the Lacey Act.
“The Quintanas repeatedly violated the law, refining their schemes each time one was exposed,” said Colbourn, noting that timber trafficking is the third largest transnational crime in the world. “Illegal trade in timber is a big deal. It has been proven that it funds civil wars, terrorist groups, and is the direction that organized crime is moving. It’s a low-risk, high-reward crime worth billions and billions of dollars. There’s a lot of attention being paid to it now internationally.”
Collaboration was critical to the success of the case. “Many different agencies and partnerships were involved,” said Colbourn. “We all worked together and had the same vision and goal.”
The impact was stunning. “When you think of enforcement actions, you don’t think about giving back to society. But in this case, we had a rare opportunity and it was so beneficial to so many people,” said Carlos Martel, the director of field operations for CBP’s Miami/Tampa Field Office. “When possible, our Fines, Penalties, and Forfeitures Division here in Florida donates seized property to mitigate the negative environmental impact of destruction. This practice not only saves taxpayer dollars, but also allows us to strengthen our relationships with state and local partners and support charitable endeavors worldwide.”
On a national level, CBP is seeking alternative methods of property disposal too. “This is a nationwide goal for Fines, Penalties, and Forfeitures. We want to replicate donations like this and support communities all over the country,” said Lisa Santana Fox, the national director of CBP’s Fines Penalties, and Forfeitures Division. “We’re encouraging our team to think outside the box with seized items. Can we find ways to recycle materials or repurpose them rather than just throwing them in a landfill? By thinking more creatively, we can save taxpayers more money and do even more good works to help Americans.”
