When you suspect your employer is involved in customs fraud, you may feel uncertain about how to proceed. Rest assured, however, that holding companies accountable for violating U.S. customs laws is, in almost all cases, the right thing to do—the path of integrity and of standing up for the rule of law and the protection of taxpayers and law-abiding importers. Whether your employer is misclassifying or undervaluing imported merchandise or misrepresenting their country of origin to evade tariffs or duties, taking the proper steps can protect your rights and expose unlawful activity. It can also result in you recovering a sizable financial whistleblower reward for your efforts.
At Mark A. Strauss Law, we understand the challenges and issues faced by potential whistleblowers. With extensive experience representing whistleblower clients in complex customs fraud cases, including overseas clients, we are committed to guiding you every step of the way and ensuring your rights are protected. If you have information about an importer engaged in customs fraud, contact us for a free and confidential consultation to discuss the facts and circumstances and your rights under the False Claims Act.
What Is Customs Fraud?
Customs fraud consists of the knowing violation of U.S. customs laws or U.S. Customs and Border Protection (CBP) requirements to reduce or circumvent duties or tariffs on merchandise entered through customs. Common customs fraud schemes include:
- Misclassifying Imports: Declaring imported goods under incorrect Harmonized Tariff Schedule (HTS) classifications to reduce or evade duties or tariffs, including applicable antidumping and/or countervailing duties (AD/CVDs).
- Undervaluing Imports: Reporting and declaring false, artificially low transaction values for imported merchandise to reduce the amounts paid in duties or tariffs.
- Transshipment & Country-of-Origin Fraud: Routing goods from the country in which they were produced through a third country with lower tariff rates or a free trade agreement before importing them into the United States, to disguise or misrepresent their true country of origin.
Evading duties and tariffs by these practices harms the U.S. economy, creates unfair advantages for dishonest companies, and undermines legitimate businesses that comply with the law.
Steps to Take if You Suspect Your Employer is Committing Customs Fraud
If you believe your employer is engaging in customs fraud, here are the steps you should consider:
1. Collect Evidence and Information
Gather documentation and information about the fraudulent practices in question. This may include commercial invoices and shipping documents, records of payments made to foreign suppliers, emails, customs declarations (such as Form 7501 customs entry summaries), and internal corporate communications involving the subject import activities. If possible, pinpoint specific shipments affected by fraudulent conduct. Subscription databases like ImportGenius can be useful sources for corroborating shipment information. Although precise legal requirements vary depending on the jurisdiction, employees generally have a legal right to copy and provide the government with evidence of their employers’ fraud, notwithstanding the terms of corporate nondisclosure or confidentiality agreements.
Be careful, however, only to collect internal records of your employer that you are authorized to access in the ordinary course of your job.
2. Avoid Disclosing Your Plans
Do not tell anyone—apart from an experienced customs fraud whistleblower attorney, with whom you should promptly set up an appointment—that you are thinking about blowing the whistle.
Moreover, be careful not to inadvertently tip off your employer that you are collecting evidence for a potential whistleblower claim. Some more sophisticated companies have data leak prevention systems that detect when employees copy files to thumb drives or forward them to their personal email addresses. They may even monitor employee conduct using cameras mounted in offices or on corporate-issued laptops or desktop computers. Therefore, it is important to speak with an experienced whistleblower attorney like Mark A. Strauss about collecting and exfiltrating the records you need for your whistleblower claim from your work environment.
3. Consult a Customs Fraud Attorney
Customs fraud claims are complex, involving intricate and often obscure legal requirements and large amounts of transaction data. An experienced customs fraud whistleblower attorney like Mark A. Strauss can not only help guide you through collecting appropriate evidence but also give you a realistic assessment of the strength of your potential case and the prospects of recovering a whistleblower reward and its potential size. An experienced customs fraud attorney will also zealously represent you in preparing, filing, and prosecuting your False Claims Act whistleblower claims and, if a recovery is obtained, maximizing the whistleblower reward you get.
Mark A. Strauss has extensive experience representing whistleblowers in customs fraud cases. Whether you are in the United States or abroad, we will work with you to protect your interests and ensure your voice is heard.
4. File a Whistleblower Complaint under the False Claims Act
Defrauding the United States out of duties or tariffs that are owed by means of fraud is legally actionable under the False Claims Act, which is a statute that entitles whistleblowers, known as qui tam “relators,” to file lawsuits against violators on the government’s behalf. False Claims Act lawsuits are initially under seal, meaning they do not appear on the public court docket while the government investigates the whistleblowers’ claims. The Whistleblower must also submit a disclosure statement to the government providing all the evidence and information they have relating to their claims. The government is entitled to determine whether it wants to intervene in and prosecute the case, or decline intervention, whereupon the matter is unsealed. The Whistleblower is generally entitled to 15%-30% of any monetary sum recovered from the violators as a reward.
It is important to note that, under the False Claims Act, you must be represented by a lawyer to file a qui tam lawsuit. A whistleblower cannot proceed pro se. Moreover, reporting fraudulent conduct to the government by other means will not entitle you to a qui tam whistleblower reward. Rather, you must report the fraud through a properly filed qui tam case.
Why Choose Customs Fraud Whistleblower Mark A. Strauss for Your Claim?
At Mark A. Strauss Law, we are dedicated to providing personalized, attentive representation to whistleblowers. We understand that stepping forward to blow the whistle on customs fraud can be a significant decision that comes with risks and challenges. That is why we, as legal counsel for customs fraud whistleblowers, work tirelessly to protect your rights, build the strongest case possible, and help you navigate the legal complexities of whistleblower litigation.
With a deep understanding of international commerce and years of experience representing customs whistleblowers—including those residing overseas—we are uniquely equipped to handle customs fraud cases in U.S. courts. Our approach is centered on integrity, discretion, and achieving justice for our clients.
Contact Mark A. Strauss Law If You Suspect Customs Fraud
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Published By
Attorney Mark A. Strauss
Mark is a battle-hardened and tenacious anti-fraud attorney with more than twenty years of experience in complex civil litigation. He has represented qui tam whistleblowers under the False Claims Act as well as victims of fraud under the federal securities laws and the Racketeer Influenced and Corrupt Organizations Act (RICO). His efforts have resulted in the recovery of hundreds of millions of dollars for clients.
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Whistleblower Practices
- False Claims Act Whistleblower Lawsuits
- Customs Fraud
- COVID-19 Relief Fraud
- Healthcare Fraud
- Government Contracting & Procurement Fraud
- Grant Fraud
- Federal Credit Assistance Fraud
- Securities Law Violations & the SEC Whistleblower Program
- Tax Fraud & the IRS and New York State Whistleblower Programs
- State False Claims Acts
