Customs Seeks to Enforce § 1592 Penalties for Misclassification at CIT

Posted by Jason P. Wapiennik on March 12, 2015

The industry website RubberNews.com has a story about a tire distributor called China Tire out of California who is facing a potential $17 million fraud penaltiy under 19 USC § 1592 for allegedly fradulent, negligent, or grossly negligent mis-classification of certain bus and truck tires into the United States. According to the story, which relies on the government’s allegations filed in the Court of International Trade, China Tire basically did some broker-shopping after its first customs broker refused to re-classify its product into a duty free Customs Money Seizure provision of the Harmonized Tariff Schedule (HTS).

Instead of classifying them as bus and truck tires, they were classified as duty-free pneumatic tires. This classification caught the attention of Customs and requests for information were sent out. China Tire responded to these requests that “they were pneumatic tires for passenger cars.” Subsequently, China Tire directed its broker to again change classification to tires that were for agriculture and forestry uses.

What followed were standard 19 USC § 1592 administrative penalty proceedings:

In July 2011, CBP issued a pre-penalty notice against China Tire and its executives John Cheng and Licheng Wang. In that notice, the complaint said, Wang and Cheng were held jointly and severally liable for 253 false entries, with a proposed penalty of nearly $8.1 million.

China Tire’s fraudulent entries cost CBP more than $404,000 in revenue, of which more than $242,000 is still unpaid, according to the complaint.

The current complaint proposes three alternative counts against China Tire, based on charges of fraud, gross negligence or negligence.

If found guilty of fraud, China Tire would face a penalty of nearly $16.9 million, plus the unpaid tariff balance. If found guilty of gross negligence, it would face a penalty of just over $1.6 million, plus the unpaid tariffs. If found guilty of negligence, it would face a penalty of $808,000, plus the unpaid tariffs.

A prior disclosure of the mis-classification would have potentially substantially reduced China Tires’ liability. If you face duty or penalty liability with customs you should contact our office by e-mail or call (734) 855-4999. We are experienced in defending customs 592 penalties, disclosing potential violations through prior disclosures, responding to notices of penalties, and preparing detailed and well argued petitions for mitigation of penalties or liquidated damages. You can also make use of our other articles, such as:

Customs 592 penalties articles:

Picasso Seized by Customs, Forfeiture Pending

Posted by Jason P. Wapiennik on March 10, 2015

U.S. Customs & Border Protection recently encountered and seized a stolen Picasso painting worth millions of dollars at a New Jersey FedEx facility. Customs seized it for the simple reason that the value was only manifested (or declared) as $37. That’s enough to make it subject to seizure and forfeiture.

The Customs officers involved deserve some praise for this seizure; people joke about picking up a Picasso at a garage sale and this case, for Customs, is pretty similar. Apparently, the stolen Picaso was sent from Belgium to the United States in December, 2014, and contained a Merry Christmas message. A small quote from the story (Fox News original here):

A stolen Picasso painting worth millions was nabbed by U.S. customs authorities in Newark, New Jersey who didn’t believe the Fed Ex package was a Christmas gift worth only $37.

[ . . . ] U.S. attorney for the Eastern District of New York Loretta E. Lynch filed a civil complaint to forfeit the Picasso and return it to France on Thursday.

[ . . . ] “The shipper was required to accurately declare the value…which is estimated to be worth millions of dollars. The FedEx airway bill and commercial invoice shipped with the Defendant declared its value as 30 Euros, or approximately $37.00,” court papers state.

[. . . ] U.S. and French authorities have not announced any arrests in the case.

What the story describes is an in rem forfeiture of the Picasso, which is a civil proceeding against the Picasso itself. Essentially, an in rem proceedings means that the Picasso itself is violator because it is here in the country illegally because it’s value was not properly declared (no doubt due to the actions, however innocent, of someone else). Because it is here illegally, that means it can be seized and forfeited to the U.S. Government. Once the forfeiture is complete, the story leads us to believe that the Picasso will be returned to the museum where it wound up missing many years ago.

That no one has yet been arrested could be the people involved were innocent purchasers, or because the French and U.S. governments are doing a deeper probe to judge the criminality of the actions of those involved and the chain of custody since it was originally stolen.

Has Customs seized your Picasso?

If you face penalty liability call our office at (734) 855-4999 to speak to a customs lawyer, or CONTACT US HERE. We are experienced in defending customs notices of penalties, and preparing detailed and well argued petitions for mitigation of penalties or liquidated damages.

CBP Seizes $200K+ in Unreported Currency

Posted by Jason P. Wapiennik on March 3, 2015

U.S. Customs seized more than $220,000 in unreported U.S. currency from two U.S. citizen pedestrians who attempted to walk into Mexico. The story below shows the skill of U.S. Customs officers in detecting people who are transporting more than $10,000 without filing the necessary currency report.

While the story calls it a failure to report, it also looks like bulk cash smuggling. Read our popular article on responding to a currency seizure by clicking HERE; (see our case results here).

U.S. Customs and Border Protection, Office of Field Operations (OFO) and Homeland Security Investigations (HSI) at the Gateway International Bridge in Brownsville, Texas arrested a man and a woman from Bryan, Texas for allegedly failing to report a total of $223,371 in U.S. currency as they attempted to enter into Mexico.

“This was certainly an outstanding interception of U.S. currency that was headed into Mexico without being properly declared,” said Port Director Petra Horne, Brownsville Port of Entry. “There are many reasons why travelers decline to declare currency being exported into Mexico, but previous experience indicates that usually it does not involve legitimate activities.”

On Feb. 26, CBP officers working outbound operations at Brownsville’s Gateway International Bridge encountered a 23-year-old woman and a 21-year-old man, both U.S. citizens from Bryan, as they attempted to exit into Mexico as pedestrians. Officers referred the couple for a secondary examination after noting discrepancies during their initial encounter and it was there that packets of U.S. currency were discovered hidden on their person. CBP OFO removed and seized 44 packets totaling $38,076 from the female and $85,365 in 22 packets from the male.

CBP-OFO arrested the man and woman and ultimately released them to the custody of Homeland Security Investigations (HSI) special agents for further investigation. HSI continued their investigation, which led to the discovery and seizure by HSI agents of an additional $100,000 in unreported currency in a vehicle associated with the couple.

If you have had cash seized by customs and are contemplating what to do next, please make use of the other information available on this website or call our office at (734) 855-4999 to speak to a customs lawyer, or e-mail us through our contact page. We are able to assist with cash seized by customs around the country, including Chicago, Atlanta, New York, Los Angeles, Orlando and many other places, and not just locally in Detroit.

Please read these other articles:

Filing a Petition for Seized Currency (with Sample and Tips) with CBP

Posted by Jason P. Wapiennik on February 19, 2015

If you are attempting to get your seized currency back from Customs by filing a petition for remission there are several legal requirements written into the Customs laws and regulations. Some do-it-yourselfers come to our customs law firm’s website looking for a sample currency seizure petition they can use to submit to Customs. Customs publishes its own set of forms for use in a wide variety of different customs enforcement/forfeiture contexts; for petitions there is a form called Petition for Remission or Mitigation of Forfeitures and Penalties Incurred (Customs Form 4609 (click to access)). The form is extremely basic and we do not recommended it for use in the context of a customs money seizure. It can be used as a starting point, though, because any petition must have at least the information from that form.

But any good petition for seized currency should have a lot more information to be effective. When we file a petition on behalf of our currency seizure clients they are at least 10 pages long because petitioning for the return of seized currency is a serious legal issue (read more about it here). Many people think it’s easy and sometimes Customs will lead you to believe it is. But why would you believe the people who just took your money? Here’s some of the questions that you should ask yourself before doing it yourself. Any lawyer you hire to help get your seized currency back should be able to answer these questions.

15 Questions to Ask Before Filing a Petition for Remission of Seized Currency with U.S. Customs:

Was the search of your baggage or person constitutional?
Was the currency seizure constitutional?
Who has the burden of proof?
What is the standard of proof that must be met by the party with the burden of proof?
Does the currency seizure constitute an excessive fine in violation of the constitution?
How do the federal courts in your state/circuit interpret the currency reporting requirement?
Did you violate the currency reporting requirement?
Are you admitting you violated the law? Are you saying too much? Are you not saying enough?
Are you admitting other violations of laws you are unaware of? (unlawful currency structuring, bulk cash smuggling, conspiracy, FCPA violations (bribes), or false statement to law enforcement, among others)
Did you bring the money from a country under economic sanctions, like Iran? If so, did you violate those sanctions or are you unintentionally admitting you violated those sanctions?
Were there any recognized mitigating factors or aggravating factors?
Are there mitigating factors that Customs has authority to recognize even though not in a written policy?
Did you make an oral amendment of your declaration the Customs did not honor?
Are documents properly notarized?
Are documents properly translated?

If your money was seized by CBP/customs call our office at (734) 855-4999 to speak to a lawyer, or e-mail us through our contact page (see our case results here). Our customs law firm handles currency/money seizures made by customs in Detroit and around the country. We are able to assist with cash seized by customs nationwide, including Detroit, Chicago, Atlanta, New York, Los Angeles, San Francisco, and Orlando.

Please read these other articles about money seizures by customs:

Crossing the Border by Dog Sled

Posted by Jason P. Wapiennik on February 17, 2015

Customs news of the interesting from newsminer.com. What happens if you’re on a 1,000 mile dog sled race, you are approached by U.S. Customs & Border Protection, and you forgot your passport at home? Let’s see:

In the middle of the Yukon Quest, mushers take the 147-mile trail journey between Dawson City and Eagle. As they sit down to a bowl of moose stew inside the old Eagle school, an officer from U.S. Customs and Border Protection asks for their passport.

In some ways, it’s a formality, since all participants and officials in the race are pre-cleared to make the trip. But as a border crossing, there’s still a check required when anyone arrives.

Mushers probably won’t be turned back without a passport, which Allen Moore proved in 2013 when he arrived in Eagle empty-handed. But having a passport ensures a musher isn’t stalled during the layover in the Yukon River community.

Customs and Border Protection Officer Timothy Woodward said he does his best to offer leeway while following the rules for crossing the border.

“We recognize it’s not a random group of people, that it’s part of an organized event,” said Woodward, who shifts from his job at the Alaska Highway post to Eagle during race time.

It looks the prize for winning is around $100,000. What if you’re mushing across the border with your prize money and you make fail to make an accurate report of how much currency you are transporting and Customs seizes your cash? If you have had money seized by Customs call our office at (734) 855-4999 to speak to a lawyer, or e-mail us through our contact page (see our case results here). We are able to assist with cash seized by customs nationwide, including Detroit, Chicago, Atlanta, New York, Los Angeles, San Francisco, and Orlando.

Please read these other articles about money seizures by customs:

CBP Currency Seizure for Preclearance is Nassau

Posted by Jason P. Wapiennik on February 13, 2015

The on-going trickle of news releases from Customs regarding the annual totals of currency seizures continues. Here is a report, also quoted below, that the U.S. Customs pre-clearance center in Nassau, Bahamas, leads all other pre-clearance centers in currency seizures.

I also expect a slight up-tick in currency seizures with the the upcoming February 19 lunar new year and the traditional gifting of lucky money in red envelopes through China, Vietnam, and other parts of Asia. Customs can target their enforcement actions. If your lucky money is seized by CBP/customs call our office at (734) 855-4999 to speak to a lawyer, or e-mail us through our contact page (see our case results here).

On to the story:

NASSAU, Bahamas—U.S. Customs and Border Protection officers at the Nassau Preclearance facility seized approximately $845,000 in unreported currency from passengers traveling to the United States from the Bahamas in fiscal year 2014.

Individuals are permitted to carry any amount of currency or monetary instruments into or out of the United States; however, if the quantity is $10,000 or higher, they must formally report the currency to CBP. If travelers have someone else carry the currency or monetary instrument for them, they must file a currency report for the entire amount with CBP. Failure to report may result in seizure of the currency and/or arrest.

“We are very proud of our officers’ attention to detail and hard work that resulted in a significant total seizure amount in 2014,” said Robert Allen Smith, area port director for CBP Nassau Preclearance. “CBP’s goal is compliance with the currency reporting requirements, and the easiest way for travelers to hold on to their currency is to truthfully report it all to a CBP officer.”

CBP Preclearance operations allow for advance inspection of passengers and special coordination with law enforcement upon arrival in the United States. Through preclearance, the same immigration, customs, and agriculture inspections of international air passengers performed on arrival in the United States are instead completed before departure at foreign airports. Currently, preclearance operations exist at 15 foreign airports in six different countries, benefitting air passengers, airports, and air carriers, in the United States and abroad.

Our customs law firm handles currency/money seizures made by customs in Detroit and around the country. We are able to assist with cash seized by customs nationwide, including Detroit, Chicago, Atlanta, New York, Los Angeles, San Francisco, and Orlando.

Please read these other articles about money seizures by customs:

Customs Confiscates $39k at Port of Douglas in Arizona

Posted by Jason P. Wapiennik on February 11, 2015

The Douglas Dispatch out of Arizona reports on some arrest/seizure activity by U.S. Customs and Border Protection. The relevant portion is:

A short time later on Jan. 25, officers conducting outbound inspections referred a 34-year-old man from Mexico for further inspection of his Nissan truck. When officers searched the man and his vehicle, they seized nearly $39,000 in unreported currency.

Officers seized the vehicles, currency and marijuana, and referred all three suspects to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

Our customs law firm handles currency/money seizures made by customs in Detroit and around the country. If you have had money seized by Detroit CBP/customs call our office at (734) 855-4999 to speak to a lawyer, or e-mail us through our contact page (see our case results here). We are able to assist with cash seized by customs nationwide, including Detroit, Chicago, Atlanta, New York, Los Angeles, San Francisco, and Orlando.

Please read these other articles about money seizures by customs:

Port of Buffalo, N.Y. border crossing check point where cbp seized cash for currency reporting violations.

Port of Buffalo Customs Currency Seizures by the Numbers (FY 2014)

Posted by Jason P. Wapiennik on February 9, 2015

Last week the Port of Buffalo released its enforcement data for 2014. I do not have any other regional data from other ports to compare it to, but it is clear that there are far more customs currency seizures at the Port of Detroit than at the Port of Buffalo.

For the fiscal year 2014, the Port of Buffalo in New York seized $267,323 in a total of 22 currency seizures; on average then, each seizure would be about $12,100. In comparison, in the Port of Detroit in Michigan for fiscal year 2013, customs seized more than $5 million at places like Detroit Metro Airport, The Ambassador Bridge and the Detroit-Windsor Tunnel. For the same period of time the national daily average of currency seizures by Customs was $650,000.

Has Buffalo CBP seized cash from you?

If Buffalo CBP seized cash from you can learn more about the process from our trusted customs money seizure legal guide and can contact us for a free currency seizure consultation by clicking the contact buttons on this page.

Seizure of $325,000 Smuggled leaving Puerto Rico

Posted by Jason P. Wapiennik on February 4, 2015

As picked up by the Associated Press, Customs seized over $325,000 in cash after finding it hidden inside a TV and two refrigerators (i.e., in other words, if done with intent to evade the currency report requirements, smuggled) on its export from Puerto Rico to the Dominican Republic. What the story does say is that anybody was arrested. But that an investigation is continuing, and as explained, the government typically has 5 years to bring criminal charges for currency reporting violations/seizures.

To me, this doesn’t necessarily sound like the money was connected to unlawful activity; a toy gun, some appliances, and… well, that’s really it. There was an alert by a K-9 to the presence of narcotics in some of the currency, but that alone doesn’t prove much. The presence of drugs on currency is widely acknowledged and does not necessarily mean the owners of the currency had any involvement with the drugs themselves, other than innocently owning some dirty money.

The CBP news release contains the most details:

U.S. Customs and Border Protection (CBP) officers stopped an illegal exportation of currency when officers searched an outbound container booked on the M/V Caribbean Fantasy Ferry destined to the Dominican Republic.

On January 27, CBP officers performed a physical inspection of all cargo inside a container destined to the Dominican Republic as part of outbound screening operations. Utilizing high tech equipment, CBP officers discovered a smuggling attempt of approximately $185,500 hidden in several items, including two refrigerators and a 32” Television set. They also found a Replica Pistol that fires blanks.

In the same container, a CBP canine alerted to the presence of narcotics on a box of personal effects and household goods. Physical inspection revealed several packages of currency wrapped in carbon paper, summing $139,980 US dollars.

In total, approximately $325,480 was seized. “This is a significant money seizure,” said San Juan Area Port Director Juan Hurtado. “The currency seized represents more than just money lost by drug trafficking organizations. These revenues are what supply the weapons and other means these organizations use for their illicit activities”.

CBP officers seized the hidden contraband and Homeland Security Investigation agents will continue the investigation. Local and federal law enforcement authorities in Puerto Rico will continue to work together to disrupt criminal activity in the island.

If I were the owner of this container, I would contact a customs lawyer immediately. Great Lakes Customs Law handles currency/money seizures made by customs in Detroit and around the country. If CBP seized cash from you can learn more about the process from our trusted customs money seizure legal guide and can contact us for a free currency seizure consultation by clicking the contact buttons on this page.

Cross Border Customs Cash Seizure Nets $39k

Posted by Jason P. Wapiennik on February 2, 2015

U.S. Customs and Border Protection released some news about recent enforcement actions, including a seizure of about 39,000 from a Mexican man entering the United States. No mention if the person involved was arrested. Have you had cash seized by Customs? You can read our popular page on Responding to a Customs Money Seizure HERE. In short, the man can get some of his seized money back from Customs if he can prove the money came from a legitimate source and had a legitimate intended use.

TUCSON, Ariz. – U.S. Customs and Border Protection officers assigned to the Port of Douglas arrested two women – one from Douglas and one from Glendale, Arizona – as well as a Mexican national man, during separate weekend smuggling attempts involving more than 300 pounds of marijuana and nearly $39,000 in unreported currency. [ . . . ]

[On] Jan. 25, officers conducting outbound inspections referred a 34-year-old man from Mexico for further inspection of his Nissan truck. When officers searched the man and his vehicle, they seized nearly $39,000 in unreported currency.

Officers seized the vehicles [and] currency, and referred all … suspects to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

Of course, even if not arrested that day the government has 5 years to criminally charge them. Our customs law firm handles currency/money seizures made by customs in Detroit and around the country. If you have had money seized by Detroit CBP/customs call our office at (734) 855-4999 to speak to a lawyer, or e-mail us through our contact page (see our case results here). We are able to assist with cash seized by customs nationwide, including Detroit, Chicago, Atlanta, New York, Los Angeles, San Francisco, and Orlando.