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Customs Fraud

This archive displays posts tagged as relevant to fraud in customs and tariffs. You may also be interested in the following pages:

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April 14, 2020

Importer Blue Furniture Solutions, LLC, its successor XMillennium, LLC, and former executives Yingqing Zeng and Alex Cheng have agreed to pay more than $5.2 million to settle allegations that they violated the False Claims Act in conspiring to evade customs duties and fees on furniture imported from China.  In a qui tam complaint by whistleblower University Loft Company, which the United States elected to intervene in, the defendants were accused of declaring wooden bedroom furniture as “metal” or “non-bedroom”, manipulating packing lists and invoices, and directing manufacturers to mislabel boxes and falsify invoices to help defendants evade U.S. customs officials.  USAO WDTX

September 12, 2019

Italian textile company Miroglio Textile S.R.L. and its U.S. affiliate Miroglio Textiles USA, Inc. will pay $650,000 to resolve charges brought in a whistleblower action alleging that the companies fraudulently reduced their obligation to pay customs duties on fabrics, decals, and other products sold by the Italian company to U.S. customers. Without any bona fide business justification, the companies reported the imports as sales from the Italian company to the U.S. affiliate at discounted prices, and used those discounted prices as the basis to calculate duties.  These sales were shams, and Miroglio misrepresented their nature, and the relationship between the entities, in certifications to Customs & Border Protection.  USAO SDNY

How Businesses Can Use Whistleblower Reward Laws to Stop Unfair Competition

Posted  07/22/19
Runner in track race starting before other racers
Most anyone can be a whistleblower. The role is not limited to the corporate insider or company employee at the meeting, on the conference call or in receipt of the email or text message where the “smoking-gun” evidence of fraud or misconduct is disclosed. Whistleblowers can be any person, or an entity, with non-public information about fraudulent conduct giving rise to a whistleblower claim.  Often, businesses...

June 6, 2019

Joseph Bailey, the CEO of NYC-based children's clothing companies Stargate Apparel, Inc. and Rivstar Apparel, Inc., has been arrested, and the government has filed a civil complaint in intervention against all three, arising from their alleged actions in falsifying records regarding the value of goods imported to the U.S. in order to evade customs duty payment obligations.  Defendants allegedly engaged in double-invoicing schemes whereby a Chinese manufacturer would provide both a "pay by" invoice with the actual price, and a second, lower invoice, to be presented to Customs and Border Protection, or a "commercial invoice" and a second "sample invoice" in a larger amount, because sample goods are not subject to customs duties.  The schemes were first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act. USAO SDNY

May 13, 2019

British fashion company Selective Marketplace Ltd., which sells products in the U.S. under its brand names Wrap London and Poetry, will pay $610,000, to resolve a whistleblower suit under the False Claims Act alleging that it improperly broke up U.S.-bound orders into multiple shipments in order to keep the shipment values below the $200 limit that would obligate the payment of customs duties.  The whistleblowers, Kristin and Stephen Vale, will receive a share of the settlement proceeds.  USAO ME

April 9, 2019

Univar USA, Inc. has agreed to pay $62.5 million to settle claims that it engaged in unlawful transshipment of saccharin manufactured in China in order to evade antidumping duties.  Univar purchased the saccharin from a supplier in Taiwan, but was alleged to be grossly negligent or negligent in failing to identify that the Taiwan-based company was not the manufacturer, but simply had imported the saccharin from China for transshipment to the U.S.  Univar allegedly evaded $36 million in antidumping duties.  DOJ

September 10, 2018

Michael Brian Anderson, a shrimper and fisherman, has been sentenced to 77 months in prison for defrauding Customs & Border Protection (CBP), after earlier being convicted of false statements, mail fraud, and money laundering. Under the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), federal subsidies are made available to American shrimpers to offset revenue lost to competitors in the global marketplace. As a domestic shrimper, Anderson was eligible to apply for the subsidies but fraudulently inflated his expenses to more than $24 million for a two year period. He then received $800,00 in subsidies, which he used to purchase boats, real estate, and stocks. In addition to his prison sentence, he is now due to pay restitution to CBP for $818,234. USAO SDGA

June 27, 2018

The government settled fraud charges under the False Claims Act against Temple St. Clair LLC for allegations of systematically avoiding payment of customs duties on goods it imported from various countries including Thailand, Sri Lanka, and Italy. Temple St. Clair allegedly perpetuated the fraud by claiming the good it imported were of a lower value than the true value. Other Temple St. Clair employees also allegedly hand-carried jewelry into the United states without declaring it to Customs and Border Patrol. Temple St. Clair agreed to pay $796,000 to resolve the allegations and institute a number of changes to its practices. USAO SDNY

Question of the Week -- Will New Tariffs Result in More Fraudulent Tariff Dodging?

Posted  06/6/18
On May 31, the White House announced new tariffs on steel and aluminum entering the United States from Canada, Mexico, and the European Union. Steel from those countries and the European Union will be subject to a 25% tariff, and aluminum will be subject to a 10% tariff. While the steel and aluminum tariffs were originally proposed to apply to imports from a larger number of countries, the White House announcement...

British Whistleblowers can Make “Millions” under US Laws if they “Shop” UK Companies, American Lawyers Say

Posted  04/30/18
The Telegraph reported this weekend on Andrew Patrick, the first British whistleblower to expose a UK company for evading U.S. import duties and only the second British whistleblower to receive an award under the False Claims Act. Mr. Patrick brought a qui tam lawsuit in 2016 against Pure Collection Ltd (“Pure”). The U.S. government intervened in the lawsuit and it ultimately resulted in a settlement of over...


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