The Law Firm of Piacentile, Stefanowski & Malherbe LLP

Customs Fraud

There are all sorts of scams and frauds that companies in the United States engage in to save money, but one of the most common is customs fraud. This occurs when a company imports products from overseas and reports them as being from a different country in order to avoid paying customs duties, or just failing to pay customs duties through some act of deception. In this article, we will discuss what customs fraud is, how it works, and some examples of companies that have been caught doing it.

Customs fraud is a type of white-collar crime that is committed by businesses in order to avoid paying duties on imported goods. The United States imposes customs duties, or tariffs, on many imported goods in order to protect domestic industries from foreign competition. These duties can be significant, and so some companies will attempt to avoid them by misreporting the country of origin for their products.

For example, let's say that a company in the United States imports TVs from China. The company knows that if it reports the TVs as being from China, it will have to pay a high percentage of the good's value in tariffs. However, if the company reports the TVs as being from Mexico, it will only have to pay a de minimis amount in tariffs, if anything at all. As you can see, there is a significant financial incentive for companies to engage in customs fraud.

Customs fraud is difficult to detect and prosecute because it often occurs in complex international supply chains. It is also hard to prove that a company intended to commit fraud, as opposed to simply making an honest mistake. However, there are some red flags that can indicate that customs fraud is taking place.

For example, if a company suddenly starts importing goods from a country that it has never imported from before, this could be suspicious. Or if a company reports the same product as being from multiple different countries over time, this could also be an indication of fraud. If you see any of these red flags, it's worth further investigating to see if customs fraud is taking place.

There have been many high-profile cases of customs fraud in the United States in recent years.

These examples show that customs fraud is a serious problem in the United States. It's important to be aware of it so that you can avoid being scammed yourself. If you think that a company might be engaging in customs fraud, you should report it to the authorities so that they can investigate. Thanks for reading!