False Claims Act  Attorneys (Customs violations/ ADCVD evasion)

Information About False Claim Act (FCA) Investigation and Violations

The False Claims Act, in particular, has become a favored statutory tool of the DOJ in Customs enforcement matters since the statute both (a) grants the government broad investigatory powers (see Government Investigations) and (b) provides for significant monetary liability.  See our curated list of FCA settlements.  

Indeed, Companies often become aware of FCA investigations when a Assistant U.S. Attorney with the Department of Justice (DOJ) begins to exercise that broad investigative power by the issuance of a Civil Investigative Demand (CID).

As to the later, the FCA provides for the imposition of treble damages, plus civil fines of between $5,500 and $11,000 per occurrence, plus interest accruing, and legal costs (not including the potential for other criminal and civil repercussions).  Moreover, the statute of limitations in false claims act violations is significantly longer than in ordinary sec. 1592 negligence cases, and is subject to waiver during periods of 'wartime.'   The FCA is unique in that it permits private individuals to initiate a lawsuit (as a whistle-blowers acting on behalf of the government) and accordingly, it provides monetary incentives to that party, termed a "qui tam relator," in the amount of 15 to 30 percent of the funds recovered by the government. 

In the Customs context, an FCA violation usually falls under a special provision in the statute known as a "reverse-false claim." This is a consequence of Customs violations typically involving material false statements, or omissions, which serve to avoid the payment of monies that would otherwise have been owed to the government. 

Customs False Claim Act cases have been lucrative for the government and typically arise in duty related disputes such as:

  • related party valuation,
  • undeclared assists or allegations of double invoicing,
  • Avoidance of antidumping and countervailing duties,
  • mis-classifications under the US tariff

AD/CVD and other violations of the customs laws are usually nuanced and complex, it is therefore critical to engage with legal counsel that holds a deep expertise in both (i) FCA defense, and (ii) international trade & customs law.  These compliance issues particularly benefit from experienced Customs counsel, since the legal issues can be complex and nuanced.   

 

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Our customs attorneys defend importers in False Claims Act (FCA) cases

Contact a firm attorney at (415) 498-0070.

Our customs lawyers are known nationally and internationally as a top law firm in customs law, and international trade law. The firm's customs attorneys are located in San Francisco, California, Seattle, Washington, and Los Angeles, California. 

 

FCA/Customs News:

November 7, 2017:  ABA reporting on statements of Judge Buchannan in the HCR ManorCare case: “I don’t think this case should have ever been brought,. . .I’m appalled, I’m embarrassed, I’m ashamed that the Department of Justice would rely on this kind of nonsense . . .”  

October 3, 2017: DOJ:  Notations $1 million dollar settlement where domestic purchases of a reseller allegedly "aided the fraudulent scheme by ignoring warning signs that . . . irregular business practices [of the importer] were highly suggestive of fraud."  Consent order here.

May 1, 2017:  Import Merchandising Concepts L.P. settlement of alleged ADCVD evasion on wooden bedroom furniture from China.

December 14, 2016: Merry Christmas -- DOJ announces its recovered Over $4.7 Billion From FCA cases in Fiscal Year 2016

April 27 2016.  Z Gallerie's $15 million settlement announced relating to alleged false invoicing designed to evade duties on wooden bedroom furniture.

April 19, 2016:  SCOTUS upholds implied certification theory of FCA liability in Universal Health Services v. US. ex rel Escobar

March 28, 2016: DOJ announces $8 million settlement in Kilgore Flares case.

February, 2016: DOJ announces $3 million settlement in small-diameter graphite electrodes case.

July 14, 2015:  9th Circuit False Claims Act decision in U.S. ex rel. Hartpence v. Kinetic Concepts overturns "original source" precedent relating to pre-2010 relator claims.  (In 2010, the FCA amended to remove the “direct” knowledge requirement.)