Companies and importers are obligated to provide U.S. Customs and Border Protection (CBP) with accurate reporting information, which allows the government to assess duties properly on U.S. imports. Under the False Claims Act (FCA), any knowing failure to accurately report or pay the full amount of customs duties is a violation of the law. A company that knowingly evades customs duties risks liability under the FCA, potentially resulting in treble damages and penalties, as High Life LLC, a family-owned New York based company has discovered.
Last week, High Life LLC was accused of evading custom duties by underreporting the values of products it imported from Asia, violating the FCA. According to court documents, from January 21, 2016, through June 1, 2016, High Life LLC knowingly caused 67 customs entry forms to be presented to CBP that contained inaccurate valuations of the apparel, avoiding paying hundreds of thousands of dollars in customs duties owed on the imported goods.
The complaint alleges that after CBP detained numerous shipments of apparel sent by the vendor in December 2015 over fraudulent concerns, High Life changed its business model from purchasing the apparel which included the costs of importation including customs duties, to purchasing the merchandise which the price paid to the vendors did not include those costs. The complaint also alleges that during that transition period, High Life declared to CBP values that were based on the prices the foreign...
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