Eight people were charged with international trade fraud by prosecutors in Houston, Texas. The federal indictment alleges a decade-long international trade fraud scheme in which two of the defendants, through their Texas-based tire company, imported rubber tires from Chinese manufacturers while submitting false information to the government in order to avoid paying customs duties.
This case involves customs duties known as anti-dumping duties. Anti-dumping duties are additional costs imposed on certain exporters to prevent those exporters from flooding U.S. markets with cheap goods to undercut domestic competitors. The government alleges that the defendants in the U.S. worked with individuals in China to create falsified invoices and submit false information relating to the tires to U.S. Customs, such as the value of the tires, the identity of the manufacturer, the country of origin, and product classification.
The allegations in this case involve wire fraud. Wire fraud is when a person knowingly and intentionally engages in a scheme to commit fraud through the use of interstate wires (internet and telephones). A conviction for wire fraud carries up to 20 years in prison and substantial fines.
The indictment also includes charges relating to the entry of goods by means of false statements. This law makes it a crime to bring imported goods into the U.S. by making false statements, including false invoices, customs declarations, falsified forms, or other false information given verbally or in writing. A conviction carries up to two years in prison and financial penalties.
To convict the defendants in this case of international trade fraud, the government must prove that these defendants had the intent to violate federal customs laws when they gave false information to Customs in order to avoid paying anti-dumping duties. The government must also prove that each of the defendants, regardless of their specific roles, had the intent to enter this scheme intentionally and with the knowledge that the information submitted to the government was false. In a case like this, the government will likely rely on evidence reflecting coordination and communications between the defendants importing the tires to the U.S. and the individuals in China who facilitated the manufacturing or exportation of the tires.
Criminal intent can be hard to prove if a defendant can show that they had no knowledge that the data being submitted to U.S. Customs had been falsified, such as by claiming they were simply submitting paperwork or information prepared by another. Defendants charged with submitting false information can also claim that there was a mistake or error in submitting false information to the government. Customs regulations are complex, and some importers even have entire legal teams working for them to stay in compliance with updated customs regulations. If a defendant worked with an attorney in submitting customs information to the government that become the basis of an investigation, they may be able to claim the defense of relying on the advice of counsel.
International trade law and customs regulations are complex. Our firm has many years of experience in cases involving allegations of customs fraud and international trade violations. If you or someone you know has been accused of customs fraud or similar international trade crimes, contact us to learn more about these cases and how we may be able to help.