Customs and Shipping Fraud Whistleblower Cases

Customs Fraud Whistleblower Cases

Do you have information that a company has cheated on the amount of customs duties it paid when importing goods into the United States?  If so, you can alert the government to this fraud, and also earn a substantial monetary reward, by bringing a qui tam lawsuit under the False Claims Act.

Customs fraud qui tam cases may be brought by anyone with non-public information about the fraud.  You might be someone working for the importing company who is now ready to blow the whistle.  You might be a customs broker or logistics specialist who has been asked to participate in, or otherwise learned about, an illegal fraud scheme.  You might be an American company that believes that a competitor is gaining an unfair advantage in your market by evading tariffs.

Our law firm, Tycko & Zavareei LLP, is one of the leaders in this cutting-edge area of False Claims Act litigation.  In recent years, cases alleging tariff and duty fraud have grown in number, in part due to the increased use of tariffs as a policy tool of the United States government, and in part due to increased knowledge among people working in the importing and logistics businesses about the availability of the False Claims Act as a tool they can use to help stop fraud and evasion.  Our firm has represented clients—including both individuals and major American manufacturers—in qui tam cases alleging various types of customs fraud.  We understand how importing works, the intricacies of the tariff system, and how to put together a False Claims Act case that is most likely to get results.

Types of Customs and Shipping Fraud

Some of the most common types of customs fraud include the following:

• Evasion of tariffs imposed pursuant to anti-dumping or countervailing duty orders (AD/CVD orders), either by trans-shipping the goods through third countries, or by misclassifying the goods under the Harmonized Tariff Schedule (HTS) to make U.S. Customs and Border Protection (CBP) believe that the goods are outside the scope of the AD/CVD orders.
• Evasion of Section 301 tariffs, again either through either trans-shipping or misclassification under the HTS.
• Falsifying the value or quantity of imported goods, including through the use of forged or altered invoices or other documents, leading to underpayment of duties.
• Falsification of other information submitted to CBP on the Entry Summary, CBP Form 7501, leading to underpayment of duties.
• Knowingly failing to properly mark imported goods with country-of-origin, either by failing to include any country-of-origin marks, by marking using improper methods, or by marking with the wrong country-of-origin.  Such failure to properly mark can lead to the imposition of “marking duties,” which can be recovered through a False Claims Act qui tam lawsuit.

The False Claims Act is a Powerful Tool to Stop Customs Fraud

Why file a qui tam case under the False Claims Act, rather than simply report the suspected fraud to CBP through an e-allegation or other procedure?  This is an important strategic decision that you should make only after consultation with an attorney who understands both options, and the pros and cons of each.  A qui tam case under the False Claims Act, however, offers at least three powerful advantages:

• First, the False Claims Act is the only way that a private citizen or company can bring charges of customs fraud in federal court. When you do this, the case is overseen by a federal judge, which offers some assurance both that the process will move at a predictable pace and that the outcome will be fair and according to law.
• Second, when you file a qui tam case under the False Claims Act, you are dealing not just with CBP, but also with the U.S. Department of Justice (DOJ). Every qui tam case has a DOJ attorney assigned to it, and that attorney has independent resources at his or her disposal to help investigate the case.  Also, the DOJ attorney assigned to the case becomes a point of contact who will talk to you about the case, and with whom you can share information confidentially.  The qui tam process is, therefore, much more transparent than the “black box” of reporting directly to CBP.
• Third, if the qui tam case is successful, you can earn a substantial monetary reward Under the False Claims Act, the person or company that initiates the case (known as the “relator”), is entitled to an award of between 15% and 30% of whatever amount of money is recovered for the government.  And because the False Claims Act provides for treble damages (meaning, the government recovers 3x the amount of the unpaid duties), and also statutory penalties, the amounts recovered for the government can be quite large.  Relators in qui tam cases routinely receive awards worth millions of dollars.

Contact An Attorney Experienced In Customs Fraud Qui Tam Cases

Two partners at Tycko & Zavareei LLP, Jonathan Tycko and Anna Haac, both have substantial experience in customs fraud qui tam cases brought under the False Claims Act.  If you have information about customs fraud, or simply want more information about the qui tam process, please call our qui tam attorneys today at 202-973-0900, or complete the Confidential Case Evaluation form on this website and someone from our firm will be in touch.