Tag: customs attorney

Summer CBP Cash Seizure News Roundup

It’s been a busy summer for customs and trade law attorneys. Enforcement by U.S. Customs & Border Protection has been up across the board. There’s been some news releases by CBP, but many I haven’t had time to post here and provide the usual analysis. Instead of letting them all out over the next few weeks, to catch myself I am just going to do a cash seizure news roundup of stories that I did not get to this summer.

Hold on tight, here we go:

CBP seizes $1.6 Million inside Propane Gas Tank

On May 23, U.S. Coast Guard Sector San Juan requested assistance from a CBP Air and Marine Operations (AMO) Marine Patrol Unit for a reported disabled vessel.   A CBP marine unit found a vessel dead in the water 16 miles southwest of Cabo Rojo, with two men from the Dominican Republic on-board.

The vessel and its occupants were navigating to to Santo Domingo from the British Virgin Islands, when the vessel’s engine failed.

The boat was for an inspection by CBP. A CBP canine alerted to the presence of a familiar odor from a large propane gas tank.  Inside the tank the CBPO, AMO agent and U.S. Homeland Security Investigations (HSI) Special Agents discovered large sums of U.S. currency. 

The undeclared currency totaled $1,638,700. CBP seized the currency under failure to declare and bulk cash smuggling laws.

See the full story here.

$3.7 Million Abandoned Cash Seized in Puerto Rico

In July, CBP patroling waters around Puerto Rico “detected a vessel navigating without lights” towards the U.S. Virgin Islands. [ . . . ] The vessel abruptly turned around [and landed] landing the vessel . . . [CBP and other federal agency agents] pursued the vessel and its occupants, who were seen unloading duffle bags from the vessel, immediately abandoning their cargo and absconding. The agents found five abandoned duffle bags containing bulk US currency. U.S. Customs and Border Protection Agents, along with agents of the Drug Enforcement Administration (DEA), seized Sunday $3.7 million in undeclared currency found inside five duffle bags on board an abandoned vessel near the coast of Fajardo. The undeclared currency totaled $3,700,000. CBP seized the currency under failure to declare and bulk cash smuggling laws. See the full story here

$372k in Beach Duffle Bag Seized in St. Thomas (USVI)

In July [CBP agents] “received a call a concerned citizen about a suspicious boat, making landfall in Bordeaux Bay, St. Thomas. The caller stated that three men were onboard and intentionally beached a 20ft Boston Whaler. The [agents] responded by vehicle to the area and noticed a single duffel bag still sitting in the sand near the boat with a Puerto Rico registration. Agents conducted a sweep of the area but were unable to locate any of the suspects. Inside the duffel bag, agents found an undetermined amount of cash in vacuum-sealed packages.  The undeclared currency totaled $372,000.  U.S. Homeland Security Investigations assumed custody of the seized currency and investigation.

See the full story here  

Agents Seize Over $100k in Bulk Cash

On May 20, CBP agents conducted a vehicle stop on a 2007 Silver Honda Element traveling westbound on Interstate 8, near Sunrise Highway.

After a brief interview, agents determined that a 33-year-old male driver and his 28-year-old female passenger were Mexican citizens with the proper paperwork to enter and work in the United States.  However, during a Border Patrol canine detection search, the canine alerted to the interior of the vehicle. 

Agents discovered 53 bundles of cash totaling $102,998, hidden in a space around the gear selector and behind the speakers of the vehicle. Agents placed the man and woman under arrest and they will be held pending criminal proceedings.

See the full story here.

$100,00 seized near Blythe, California

[A]gents conducted a vehicle stop on a four-door sedan traveling eastbound on Interstate 10. Agents requested, and were granted consent, to search the vehicle after the driver, a male 23-year-old United States citizen, admitted to having drug paraphernalia. During the search, agents located a trash bag containing $96,565 in cash concealed in the rear compartment of the vehicle. Additional evidence was discovered in the vehicle linking the money to drug smuggling activities. The driver claimed that the cash did not belong to him and it was seized by agents.

See the full story here.

 

A picture of CBP canine who discovered unreported cash that was seized by CBP at Dulles Airport in front of the table of cash emblazoned with CBP logo.

Dog Detects Federal Currency Reporting Violations at Dulles Airport

U.S. Customs & Border Protection uses canines to assist its law enforcement functions. When most people think of police dogs, they think of their use in detecting drugs; but they can also be used to find the presence of unreported cash.

And that is the subject of a recent story from CBP in Dulles airport when they seized nearly $75,000 from two men bound for Serbia (also apparently involved in unlawful cash structuring).

STERLING, Va. — U.S. Customs and Border Protection (CBP) officers seized a total of $73,900 from two Serbia-bound travelers for violating federal currency reporting requirements on Monday at Washington Dulles International Airport.

Neither man was criminally charged. CBP officers released the travelers to continue their journey.

CBP officers initially stopped the first man in the jetway to the airplane and asked how much currency he possessed.  The man reported $1,500 verbally and in writing.  CBP officers inspected his carry-on baggage and jacket and discovered four envelopes that contained approximately $50,000.

Meanwhile, CBP’s currency detector dog “Nicky” alerted to another passenger, who then claimed to be the first subject’s son-in-law.  The second man reported that he possessed $7,000, but a subsequent inspection discovered two envelopes in his jacket that contained approximately $20,000.

CBP officers verified that the currency totaled $73,900 in U.S. dollars between the two family members.

In this case, the violations of the federal currency reporting laws did not lead to criminal charges, but theoretically they could be charged within 5 years due to the statute of limitations period. But as always, federal currency reporting laws mean that, even when not criminally charged, asset forfeiture of the cash by customs will still occur. In this case, CBP seized almost all of the money. To get it back, these men will have to show that the money has no nexus to illegal activity and, even if they can do that, they will still likely face a loss of at least 50% of the money; CBP’s guidelines for structuring and bulk cash smuggling are far more stringent than their guidelines for a failure to report.

The Loudon Times-Mirror reported on the same story, and added that the dog, Nicky, is a Malinois dog, and that CBP returned $1,500 to the men and released them to continue their trip, which is generally called a “humanitarian release” by CBP.

Have you violated the federal currency reporting regulations?

If you violated the federal currency reporting regulations, you really need a lawyer. Read our trusted customs money seizure legal guide and can contact us for a free cash seizure consultation by clicking the contact buttons on this page.

$830K Seized for Bulk Cash Smuggling

When is a 2010 Dodge Journey worth almost a million dollars? When there is $830,000 dollars hidden in the dashboard.

CBP has broad search authority. In fact, not only do they have largely unfettered discretion to search at the border (not only land borders but airports), but they also have broad search authority at the “functional equivalent” of the border. The current state of the law in this area means that, among other things, CBP may pull over cars within 100 miles of the border and question those inside if they have reasonable suspicion of unlawful activity. If you want to learn more, read this nice summary of the law.

This 100-mile border search authority is the context for the following news release:

TEMECULA, Calif.—U.S. Border Patrol agents arrested a man Tuesday who had hidden large quantities of cash behind his SUV’s dashboard.

The incident occurred at approximately 2 p.m. when agents patrolling Interstate 15 stopped a 2010 Dodge Journey. The 54-year old Mexican national driver was unable to answer routine questions consistently.

A K-9 sniff of the man’s vehicle resulted in a positive alert, agents then brought the vehicle to the I-15 checkpoint to conduct a more thorough search. At the checkpoint, agents put the vehicle on a lift and discovered a hidden compartment behind the dashboard. The compartment contained 61 bundles of cash.

In total, the bundles contained $830,060 in U.S. currency. The man was arrested and charged with bulk cash smuggling.

If you have had currency seized from Customs do not try to respond yourself but hire our firm, because we know what we are doing and have successfully handled many cases like yours. If you have questions, please give us a call at (734) 855-4999. 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:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?
  11. Statute of Limitations for Currency Reporting Violations
  12. Filing a Petition for Seized Currency (with Sample and Tips) with CBP
  13. Don’t Talk About Your Customs Currency Seizure Case

Baltimore CBP Seizes Almost $28K in Unreported Currency from Maryland Man

CBP seized almost $30,000 in cash from a traveler at Baltimore Washington Thurgood Marshall Airport last week when he was leaving the United States to the United Kingdom. Many people are not aware the the currency reporting requirement for more than $10,000 applies to when you enter or LEAVE the country. He verbally reported $8,000, wrote down $5,000, then said the money belonged to others but nothing more than $8,000 in total was being transported.

What? If true, no wonder the officers became suspicious. When a story changes 3 times in less than a minute, there is good cause to believe someone is lying. If not true, well… that wouldn’t be the first I saw CBP relate their own version of events that differed vastly from what clients have described to me.

The salient portion of the story is quoted below (full story is here):

Picture of $27,773 seized from luggage.
CBP officers found a total of $27,773 on his person and in his luggage.

The man, who was boarding a flight to the United Kingdom, was selected for questioning by CBP officers who were conducting an outbound international flight enforcement operation. The man initially reported possessing $8,000 but completed a financial reporting form stating $5,000. After signing the form he stated he was also carrying currency for others, but that all the currency totaled less than $8,000. CBP officers found a total of $27,773 on his person and in his luggage. CBP officers seized the $27,773 and advised him how to petition for the return of the currency.

If you have had currency seized from Customs do not try to respond yourself but hire our firm, because we know what we are doing and have successfully handled many cases like yours. If you have questions, please give us a call at (734) 855-4999. 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:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?
  11. Statute of Limitations for Currency Reporting Violations
  12. Filing a Petition for Seized Currency (with Sample and Tips) with CBP
  13. Don’t Talk About Your Customs Currency Seizure Case

Customs officers seize hidden cash

Last month, CBP seized $65,000 from a Mexican national for “failing to declare” more than $65,000 in currency. They released the individual’s name, so that means he is being criminally prosecuted. Though CBP calls this a “failure to declare” it is really failure to declare (or to report) and bulk cash smuggling, because the money was concealed in the seat of the vehicle. Check out the image below. As we always note, this case differs from the scenario usually faced by our clients, which is a customs seizure of money at the airport for failure to report.

Customs officers seize hidden cash behind automobile seat.
Customs officers seize hidden cash behind automobile seat, totaling more than $65,000 in US currency.

U.S. Customs and Border Protection officers arrested a 24-year-old Mexican national Wednesday (July 22) for failing to declare more than $65,000 in U.S. currency when he attempted to cross into Mexico through the Port of Nogales.

Officers conducting outbound inspections at the Dennis DeConcini crossing selected a Ford sedan, driven by Marco Allan Nevarez-Guzman of Magdalena, Sonora, Mexico, for further inspection and found unreported money hidden behind the vehicle’s seats.

Officers processed the vehicle and currency for seizure, arrested and referred Nevarez to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

If you have had currency seized from Customs do not try to respond yourself but hire our firm, because we know what we are doing and have successfully handled many cases like yours. If you have questions, please give us a call at (734) 855-4999. 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:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?
  11. Statute of Limitations for Currency Reporting Violations
  12. Filing a Petition for Seized Currency (with Sample and Tips) with CBP
  13. Don’t Talk About Your Customs Currency Seizure Case

Tuition Money Seized by Customs

Customs seizure of tuition money is a common occurrence in the weeks prior to the start of either semester of the school year. Like all customs currency seizures, the seizure typically happens because of a failure to file a currency report by people transporting money into the United States of amounts over $10,000.

Lots of foreign students come to the United States and pay their tuition in cash as most colleges won’t accept tuition payments by credit card. Likewise, many foreign exchange students and children of immigrants get a lot of cash assistance from family overseas who understand their duty to pay for their children’s education; it may be a lump $15,000 sum from a parent or grandparent, or a few hundred or thousand dollars from several different relatives or benefactors.

Customs can easily identify someone on student visa, who is relatively young, and is arriving from China, India or Korea; we previously wrote about how customs can “target” currency reporting enforcement based on just these types of criteria. This makes it very easy for them to target students who will then be required to give an accurate report of currency down to the dollar, and if they don’t to seize their cash. The only thing higher than the cost of education is the cost of not accurately reporting money over $10,000 to customs.

What to do when Customs seizes your tuition money?

Traveling with cash? Claim monetary instruments exceeding $10,000 USD!
Don’t let customs seize cash. Traveling with cash? Claim monetary instruments exceeding $10,000 USD!

Take the advice we have already given for responding to a customs money seizure by reading our popular article on the topic: Responding to a Customs Currency Seizure. Currency seizure cases are handled the same whether the money that was seized by customs was intended to be used to pay for college tuition or, for example, for travel expenses. As long as the use of the money is legitimate (and tuition is a legitimate use) and the source of the money is legitimate, with the right legal help you have a good chance of getting your seized tuition money back. If you want to know what a petition to get seized money back from customs looks like, read our article here.

Will I get the money in time to pay my tuition?

It really depends on a variety of circumstances, as we talked about in our popular article on the topic: How long does it take Customs to decide a petition for a currency/monetary instrument seizure? In every case, hiring the right attorney to handle your case can speed up the process, from getting the notice of seizure issued, to gathering evidence (obtaining supporting documents, preparing affidavits and giving customs everything they need without waiting for them to request additional documents), researching and drafting the legal basis for the obtaining a return of the seized currency in the petition, and ultimately, if successful, getting the money returned without delay, often by direct deposit. We work hard at Great Lakes Customs Law to get your seized currency returned back to you in a timely manner by doing the job right the first time.

How can I find out more or hire a law firm to help with my customs currency seizure?

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 Detroit, Chicago, Atlanta, New York, Los Angeles, Orlando and many other places. Please read these other articles:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?

U.S. Customs Seize $541,000 in Unsafe Consumer Products

When importing into the United States an importer must make sure to comply with the customs laws for classification, valuation, invoicing, etc. But they also must make sure that they’re products are not harmful or in violations of the myriad of other regulations enforced by CBP at the border; whether they be FDA, Department of Agriculture, or the Consumer Product Safety Commission. Recently, customs seized over half a million dollars in unsafe consumer products in a joint effort with the French government.

The story below:

U.S. Customs and Border Protection (CBP) and French Customs General Directorate announce the results of Operation Bathe and Beaute, a bilateral Intellectual Property Rights (IPR) enforcement operation targeting counterfeit personal care products and electric personal care devices. The joint operation, conducted from April 8 through May 4, resulted in the seizure of 76 shipments of more than 31,000 counterfeit items for a combined manufacturer’s suggested retail price of $541,000.

“Operation Bathe and Beaute reflects our ongoing efforts to interdict illegal trade in counterfeit merchandise, which threatens the competitiveness of legitimate businesses and can jeopardize consumer health and safety,” said Assistant Commissioner Brenda Smith of CBP’s Office of International Trade.

Box of counterfeit items valued at suggested MSRP of $541,000.
76 shipments of more than 31,000 counterfeit items for a combined manufacturer’s suggested retail price of $541,000.

“After the successful Core Systems operation in late 2013, this fourth joint operation between CBP and French Customs demonstrates once again how important it is to exchange information and act together to fight organized crime in a global world,” said François Richard, French Customs Attaché.

The four week operation focused on personal care products and devices that potentially introduce dangerous chemicals and bacteria to the skin and eyes or burning or electrocution due to non-standardized wiring and ineffectual family planning protection to the consumer. Products seized during this event included make-up, condoms, hair removal devices, contact lenses, hair curlers, straighteners and skin cleansing devices.

 

You might be facing penalties from customs for importing counterfeit merchandise. We can help. Typically, we recommended preparing and filing a petition, with the assistance of legal counsel, which argues persuasively for the substantial mitigation, or when the facts and law warrant it, cancellation of the penalty in full.

Great Lakes Customs Law has been very successful in getting these kinds of penalties reduced and, sometimes, even eliminated entirely (some history of our success is HERE).If you have had merchandise seized by customs because they allege it is counterfeit and contains trademark violations and/or have a received a notice of penalty for importing alleged counterfeits or for making an importation contrary to law, 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 petitions for customs penalties and seizures around the country, including Detroit, Chicago, Atlanta, New York, Los Angeles, Orlando and many other places. Please read these other articles:

$39K in Unreported Currency by U.S. Customs at Houston Airport

U.S. Customs and Border Protection seizes a lot of money. In the last fiscal year, customs seized more than $81 million dollars in “undeclared or illicit currency.” On June 6, Customs seized over $39,000 in cash from a traveler arriving from Nicaragua. The story says it was seized for a “failure to properly report currency” exceeding $10,000, however, the fact that the money was tucked away in the pockets of 3 different pairs of jeans could give Customs enough facts to allege that it was concealed for the purposes of evading the report requirement — otherwise known as bulk cash smuggling.

U.S. Customs and Border Protection officers working at George Bush Intercontinental Airport, June 6, seized over $39,000 after a traveler failed to properly report the money as required by U.S. law.

Customs Seizes $39k from Nicaraguan Traveler
Some of the money was stored in the pocket of the traveler’s clothing.

The traveler, a 39-year-old U. S. citizen, arrived from Managua, Nicaragua and was enroute to Los Angeles, California.

While conducting an enforcement operation, CBP Officers encountered the traveler, and asked if he was transporting more than $10,000 in either currency or other monetary instruments. The traveler reported he was transporting $7,800; however, a search of his luggage discovered U.S. currency tucked in the pockets of three pair of jeans packed in his suitcase. The total amount of currency seized was $ 39,162.

The currency was seized for failure to properly report currency in an aggregate amount exceeding $10,000.

“International travelers are provided multiple opportunities to truthfully report the amount of currency they are carrying,” said CBP Port Director Charles Perez. “Those who refuse to comply with the federal reporting requirements face the risk of having that currency seized.

“There is absolutely no limit to the amount of currency a traveler can bring into or take out of the United State,” Perez added. “The only requirement is to report amounts that reach or exceed $10,000.”

Travelers report currency by completing FinCEN Form 105 and giving it to a CBP officer. Currency is not limited to U.S. currency, but includes all negotiable monetary instruments such as Traveler’s Checks, money orders and securities. A complete list of negotiable monetary instruments is available on FinCEN Form 105.

Some of that money might be connected to illegal activity but a lot of that money is also from innocent, arriving travelers, confused about the currency reporting requirement. This appears to be one of those innocent cases where, for whatever reason (be it panic, ignorance, or unfair questioning), he only reported $7,800 instead of the nearly $40,000 that he was carrying. Because Customs has not disclosed his name, it sounds as though criminal charges were not filed yet.

If you have had your currency seized, please 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:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?
  11. Statute of Limitations for Currency Reporting Violations
  12. Filing a Petition for Seized Currency (with Sample and Tips) with CBP
  13. Don’t Talk About Your Customs Currency Seizure Case

U.S. Customs Seizes $28k Outbound to Mexico

A relatively small amount of currency was seized from a Mexican couple leaving the United States last week at the southern border. The story, which comes to us from a CBP news release, makes no mention of arrest of the couple so it’s a fair assumption that there was no arrest.

$28k Currency Seizure
$28k Currency Seizure

Shortly before 8 a.m. on March 10, the Eagle Pass Enforcement Team – comprised of CBP officers from the Port of Entry and U.S. Border Patrol agents – inspected a 2002 Ford F-150 pickup truck as it departed the United States, bound for Mexico, via the Eagle Pass International Bridge I. Upon inspecting the pickup, which was occupied by a man and woman from Piedras Negras, Coahuila, Mexico, Enforcement Team officers discovered a large quantity of one-hundred dollar bills. Officers seized a total of $28,100 in undeclared currency.

What happens to the seized currency now? Well, it will be forfeited and become property of the U.S. government unless a person with an interest in the property makes an offer in compromise, files a claim, or files a petition with CBP’s Fines, Penalties & Forfeitures office to get the money back. The money can only be returned once a legitimate source and intended use of the money is proven. In most of our client cases, we file a petition. If you want to know what a petition for return of seized currency should include, read our article on Filing a Petition for Seized Currency.

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:

  1. Seizure of currency and monetary instruments by U.S. Customs
  2. Seizure for bulk cash smuggling into or out of the U.S.
  3. Structuring currency imports and exports
  4. Is it $10,000 per person?  Under what circumstances is filing a report with Customs for transporting more than $10,000 required?
  5. Criminal & civil penalties for failing to report monetary instrument transportation
  6. Is only cash currency subject to seizure by Customs?
  7. Responding to a Customs currency seizure
  8. How do I get my seized money back?
  9. Getting money seized by U.S. Customs back while staying overseas
  10. How long does it take Customs to decide a petition for a currency/monetary instrument seizure?
  11. Statute of Limitations for Currency Reporting Violations
  12. Filing a Petition for Seized Currency (with Sample and Tips) with CBP

Customs Seeks to Enforce § 1592 Penalties for Misclassification at CIT

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 Seizureprovision 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: