We authored an article for Law360 outlining a recent Department of Justice (DOJ) intervention in a False Claims Act (FCA) customs fraud matter.
DOJ alleges that the defendant defrauded the U.S. government by underpaying customs duties on commercial apparel imported from China. The government also asserts that the defendant “engaged in a conspiracy scheme to withhold rightfully owed customs duties on imported commercial apparel by undervaluing it.”
We anticipated increased scrutiny of customs transactions and a corresponding uptick in fraud investigations. More specifically, we emphasized “DOJ’s ongoing commitment to enforcing the FCA in the context of customs fraud, and holding companies and individuals accountable for schemes that deprive the U.S. of revenue.”
In this context, we cautioned, “companies should ensure that information provided to [U.S. Customs and Border Protection] accurately reflects the transactions at issue. FCA liability does not arise if an individual simply makes a mistake. Rather, the scienter element requires either an intent to engage in the conduct, the burying of one’s head in the sand in the face of a substantial risk, or a reckless disregard for the falsity of the information provided.”
The full article, “Takeaways From DOJ’s Latest FCA Customs Fraud Intervention,” was published by Law360 on May 8 and is available online (subscription required) or the PDF provided.