Civil and Criminal Investigations in Customs Fraud or Evasion

Companies facing a civil or criminal investigation for customs fraud or evasion of customs duties, excise taxes, or antidumping / countervialing duties (AD/CVD), are advised to immediately retain legal representation.

Our customs attorneys understand the nuances of the customs and trade laws.  We understand and can respond to such allegations.  There may be legal measures that should be undertaken immediately to either dispute, confirm, challenge, or protect legal rights. 

Our customs lawyers are known nationally and internationally for their work in customs and international trade law. 

The firm's offices are located in San Francisco, California, Seattle, Washington, and Los Angeles, California.

 Our practice areas include classification, valuation, admissibility, customs detentions, seizures and penalty proceedings, and customs audits.  We bring litigation, and handle numerous other types of issues arising in international trade. See our services listings.

General Information about government investigations

The Office of the U.S. Attorney, organized within the Department of Justice (DoJ), is responsible for prosecuting civil and criminal violations of federal law.  If there is reasonable cause to suspect criminal wrongdoing, the Assistant U.S. Attorney (AUSA) and federal investigators acting under the authority of the DOJ have a number of investigative tools at his or her disposal, such as:

• Wire taps

• Search Warrants

• Civil Investigative Demands (CID)

• Subpoenas

• Discovery

Civil versus Criminal Proceedings

Civil actions and criminal actions implicate different burdens of proof and differing legal processes.  

In the civil context, a defendant may be sued by the United States and find itself arguing in slow moving federal proceedings for many years.  

However, in the context of a criminal prosecution, a defendant may be suddenly informed that a grand jury was convened to indict the defendant (or a charging document filed in lieu of an indictment), and that the defendant needs to secure counsel to prepare immediately for trial.  Defendants who are foreign nationals may face immigration (and particularly visa issues) implicated by the possibility of criminal charges being brought.

Civil Investigations

If a civil investigation is carried out by an agency, a subpoena may be issued requiring the defendant to furnish testimony and/or documents. Alternatively, a search warrant may be secured, and it serves to accomplish the same purpose of fact-finding.   Either method results in the government securing documents and obtaining testimony as evidence.

Another relatively recent development relates to the government's use of Civil Investigative Demands (CIDs).  These are provided for under 31 USC 3733.   CIDs were originally created as a tool available only to the Attorney General; however, in 2009, the Fraud Enforcement and Recovery Act of 2009 (FERA) allowed the Attorney General to delegate that authority to the various US attorneys, located around the country.  The CID is similar to a subpoena in that it may seek both documents and testimony, however, unlike a subpoena, the CID is much easier for the government to issue.  Additionally, while the CID may appear similar in nature to the traditional tools of civil discovery (such as document requests, interrogatories and depositions) note that these investigative tools are not mutual (as is the case in discovery), and may be utilized against a broad range of non-party individuals and companies.  An importer may be required to respond to the CID, and concurrently, so may the importer's Customshouse broker.

In terms of invoking liability for trade compliance violations, Customs and Border Protection (CBP) most commonly asserts civil liability under the authority of the Customs negligence and fraud statute (19 U.S.C. 1592). 

In contrast, an Assistant U.S. Attorney (AUSA), may decide to invoke any number of other federal statutes (both civil and criminal), including 18 U.S.C. 1341 & 1342 (mail & wire fraud); 18 U.S.C. 1001 (false statements); 18 U.S.C. 545 (smuggling), and 31 U.S.C. 3729 et seq. (False Claims Act)

Curated News Re: Criminal Fraud & Investigations:

See also, our FCA News Page

March 19, 2024: U.S. Attorney’s Office, District of Puerto Rico: Owner and company file guilty pleas in response to conspiracy allegations that they caused “Made in Malaysia” labels to be placed on boxes containing porcelain tiles manufactured in PRC, then imported a container into the U.S. declaring it as Malaysian.