Customs violations and False Claims Act whistleblower cases focus of President elect Trump administration

Whistleblower cases involving companies that submit false declarations to reduce or avoid customs duties are on the rise and penalties are skyrocketing. The False Claims Act allows a private citizen whistleblower with unique and primary information about customs fraud to take an action on behalf of the federal government. Whistleblowers are coming forward to reveal the customs fraud and are collecting large awards for doing so. Customs violations generally alleged in False Claims Act cases filed by whistleblowers include;misrepresenting the country of origin. In one such case, United States ex rel Dickson v. Toyo, the whistleblower alleged that  a Japanese company false declared that Japan and Mexico were the countries of origin to avoid duties applicable to China and India. The company pad $45 million to settle the claim with the government.

Another type of case involves misreporting the value of the goods. In U.S. ex rel Tu v Kuo, an importer of computer cable from China allegedly used two set of invoices to avoid duty payments. Yes another common form of customs abuse is to mis-classify the goods. Some customs duties are based on the nature of the goods brought in. As an example of this, an importer of auto parts allegedly misclassified them as unfinished to exempt them from the 2.5 percent customs duty.

Given the statements of President elect Trump, the issue of customs fraud is expected to be a significant one and more attention paid to it to stop product dumping which under cuts American business.

Jeffrey Newman represents whistleblowers.