You’ve probably heard plenty about tariffs lately, including a heavy dose of speculation.
What you may not have heard about are the fraudulent measures some companies take in an effort to evade them and essentially get an unfair pricing advantage by defrauding the federal government.
If existing tariffs increase or new ones are imposed, we’ll likely see more attempts to evade them, including fraudulent labeling or transshipment, which involves shipping to an intermediate destination that isn’t covered by the tariff. Often, companies participating in this type of fraud keep two sets of books to prevent or trim what they pay in customs duties or tariffs.
But this is where whistleblowers can help; they often are the only ones who see it happening. During the past 12 years, the government has recovered more than $220 million in settling 43 False Claims Act cases alleging customs fraud, according to The Anti-Fraud Coalition. Of those 43 cases — initiated by internal whistleblowers, industry experts, or competitors — the government intervened in 42. This high rate of government intervention is strong evidence of the government’s interest in customs fraud enforcement actions brought by whistleblowers.
Keller Grover represented a whistleblower in a customs fraud case the government settled for $500,000 in 2015. And whistleblowers who help the government successfully pursue a customs fraud case could receive 15 percent to 30 percent of recoveries as an award.
Keep in mind — customs fraud also can involve other types of fraud, such as counterfeit goods. U.S. Customs and Border Protection recently announced that it seized more than $18.7 million in fake Gibson guitars that were shipped into California from Asia. (This can be a particular risk near the holidays.) All authentic Gibson guitars are made in the United States.
Not only can customs fraud harm businesses and the federal government; it can threaten consumers with unsafe goods or by tricking them into paying high amounts for lesser products.
If you suspect this type of activity, contact Keller Grover for a free and confidential consultation — our experienced whistleblower attorneys can answer questions and work with you to provide prudent next steps.