05/22/2013 // Whistleblower Law Firm // whistleblower lawyers of Keller Grover // (press release)

Issues related to customs fraud are not part of the everyday discussions of most people in the general population, but this type of fraud is a matter that impacts many people in ways they don’t even realize. Customs fraud, or fraudulent practices related to imports, can include a number of behaviors. Removing required labels before products are delivered to out of country purchasers, mislabeling products to conceal actual country of origin, and undervaluing products to avoid paying import duties as required are just a few examples of bad acts that fit into this category.

Late last year, Toyo Ink SC Holdings Co. and its affiliates agreed to pay a multimillion dollar settlement amid allegations that they engaged in customs fraud by submitting false claims to the U.S. government to avoid paying duties on imports. The company was accused in a False Claims Act (FCA) case of disguising the country of origin for ink products on documentation submitted to the U.S. Customs and Border Protection for several years.

For Toyo, the unethical behavior resulted in their having to shell out millions for monies owed to the government. However, the economic impact on businesses and employment must also be noted. When companies overseas lie in an attempt to reduce the costs of goods brought into the U.S., the cost benefit analysis of manufacturing either in or outside of the country gets skewed. While most people think of Medicare/Medicaid fraud and defense contract fraud when they think about the False Claims Act, any effort to avoid paying the government what it is due, in this case misclassifying products to avoid import duties, may be a violation of the False Claims Act.

By its very nature, though, customs fraud is difficult for the government to detect. It involves overseas factories, shipping companies, and customs brokers among others. While whistleblowers are critical, False Claims Act cases involving customs fraud also highlight that the person blowing the whistle does not necessarily have to be an insider of the business engaged in the fraud. They may be a supplier or even a competitor. Ultimately, curbing customs fraud achieves two important goals – it provides money owed to the federal government but it also assures that the true cost of manufacturing goods overseas is reflected in products sold in the United States.

The whistleblower lawyers of Keller Grover are available for those with information about customs fraud that could potentially lead to a False Claims Act case. The law firm can provide a free case evaluation or consultation for those who need more information about their rights. If you have information about customs fraud, contact the Keller Grover whistleblower attorneys today for information on how we can help you.

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