Customs Fraud and Whistleblowing

There are 328 ports of entry in the United States, where millions of passengers and billions of dollars’ worth of imported goods are processed by the nearly 60,000 employees of the United States Customs and Border Patrol (CBP) every single day.

Out of those transactions, it is estimated that $122.7 million in fees, duties and taxes are paid in accordance with that huge amount of commerce coming into the country each day. About $290,000 is seized in illicit currency, and another $3.8 million is seized in products that violate Intellectual Property Rights.

Since there is such an expansive swath of goods coming into and exiting the country each day, it is simply impossible for the government to track and check everything. This is why, when coming into the country after going abroad, you are asked to declare any items that you are bringing back which may be a cause for concern, or may need to pay a fee to bring in. A huge part of the system is based on trust that people will do the right thing.

However, those who feel that they can get away with defrauding the trust system, will try to do so, and that is the basis of customs fraud.

The most common type of customs fraud is through misclassification – or lying – about what you are bringing into the country, how much you’re bringing in or where you’re bringing said item in order to avoid fees and taxes or pay a lower rate than you otherwise would have to pay. Some may try to lie on paperwork and disguise a package as something that costs significantly less than what actually resides in the package.

Customs fraud is illegal under the amended version of the 2009 False Claims Act, and a specific provision known as the Fraud Enforcement and Recovery Act covers those who knowingly misclassify goods on which they owe money to the government.

Anybody who provides information leading to somebody who has knowingly committed customs fraud has protections as a whistleblower, and cannot be retaliated against, threatened with harm or prosecution as a result of their efforts to catch the illegal activity.

Anybody can report suspected criminal activity – whether it’s illegal importing of goods, people or other human rights violations – report trade violations such as Intellectual Property Rights infringement, or other evasion violations of federal law by utilizing this link to the Customs and Border Protection e-ALLEGATIONS page.

Reporting customs fraud, while a legally-protected right, is a serious matter. It is vital to make sure that any report of fraudulent activity is properly filled out and filed. The only way to ensure that you have taken the necessary steps is to consult with a team of knowledgeable legal professionals.

If you know anything about a business or organization committing any form of fraud, especially if they are lying about importing or exporting of goods, you have a duty to report it, and an incentive to do so, as there are potential monetary rewards for successful action brought against violators.

At Altman & Altman LLP, we have over 40 years of experience handling a wide variety of claims and specialty legal matters, and can help you get started in filing a customs fraud report. We can also make sure that you are able to follow up on the status of that report and collect any reward payment that is owed to you.

Call us for a free consultation today at 617.492.3000 or toll-free at 800.481.6199. Someone is always standing by to take your call; we are available 24/7.