Blowing the Whistle on Customs Fraud
Customs duties and fees are the second largest source of federal government revenue after taxes. Unfortunately, in 1997, U.S. Customs and Border Protection (CBP) estimated that over $300 million is lost to fraud each year, while private groups have indicated that customs fraud costs the United States tens of billions of dollars in unpaid duties and fees yearly.
It is clear that customs fraud is rampant. For many importers, customs fraud is considered an industry standard as it is commonly understood that Customs only inspects 2% of imported goods and its inspection priorities are anti-terrorism and security. Adding to the problem, when fraud is uncovered, Customs has typically imposed penalties that are negligible and work little deterrent effect upon would-be-fraudsters.
CBP needs whistleblowers to come forward with inside information in order to curtail the problem of customs fraud. Under the federal False Claims Act, whistleblowers with information are entitled to a reward of between 15-30% of the government’s recovery from the fraudster. Anyone can come forward with information to assist Customs in fighting fraud: import/export agents or brokers, managers, longshoremen, office personnel, accountants, consultants, and even a competitor business who is tired of the unfair price advantage fraudsters receive by cheating Customs.
Customs fraud allegations may involve such practices as: undervaluing goods and product, misclassifying goods to diminish import duties, misrepresenting antidumping duty obligations, and failing to identify the true country of origin in order to avoid increased duties, fees, or tariffs.
If you are aware of an entity that is lying or misrepresenting information in order to diminish its obligation to pay duties, fees, or tariffs, contact me at (801) 845-9866 to discuss your case.