Ford Motor Company Settles Claims Relating to Under-Valued Vehicles for $365M

Ford Motor Company has agreed to pay $365 million for allegedly misclassifying and understating the value of hundreds of thousands of vehicles.

According to the Department of Justice, Ford engaged in a scheme to avoid higher duties by misclassifying cargo vans. Between 2009 and 2013, the company imported Transit Connect cargo vans into the United States but presented them to Customs and Border Protection (CBP) with temporary seats and other features to make them appear to be passenger vehicles. The seats were never intended to carry passengers and Ford removed them as part of post-importation processing. The inclusion of the seats allowed Ford to avoid paying the 25% duty rate for cargo vehicles and instead they paid a duty rate of just 2.5%.

This case dates back to February 2012 when the Port of Baltimore advised Ford it was initiating an investigation into Ford’s classification practices. (Typically, prior to investigating an entity, CBP sends a request for information first. For more information on how this process typically begins read “Now, More than Ever, Be Wary of and Responsive to a CBP Form 28!”).

In 2013 Customs determined that the vans were improperly classified and liquidated the vehicles at the 25% duty rate. Ford protested, and Customs denied the protest. Ford then filed a complaint with the U.S. Court of International Trade (CIT). The CIT agreed with Ford, finding that Ford engaged in legitimate tariff engineering. The government appealed to the United States Court of Appeals for the Federal Circuit where […]

By |2024-03-15T14:50:57-04:00March 15, 2024|Import, Penalty|Comments Off on Ford Motor Company Settles Claims Relating to Under-Valued Vehicles for $365M

Clothing Wholesaler Executive Avoids Paying Millions in Duties – Sentenced to 4 Years in Prison

Mohamed Daoud Ghacham, a 40-year-old executive from California has been sentenced to 48-months in prison for customs fraud. Ghacham, who was at the helm of a Paramount-based clothing wholesale company, engaged in a deceitful scheme that allowed his business to sidestep paying millions in customs duties on imported garments.

United States District Judge Maame Ewusi-Mensah Frimpong handed down the sentence, which also includes a restitution payment of $6,390,781.

The fraudulent operation involved importing clothing from China and presenting U.S. Customs and Border Protection (CBP) with a fraudulent second invoice with a lowered value. At Ghacham’s direction, Chinese suppliers would prepare two invoices for orders – a true invoice with the actual price paid and a fraudulent invoice with an understated price. Ghacham submitted the false invoices to CBP, allowing them to avoid millions of dollars in duties for over a decade.

Ghacham also faced charges related to conspiring to engage in transactions with a known narcotics trafficker.

The sentencing of Ghacham and his company concludes a comprehensive investigation by Homeland Security Investigations and CBP, with assistance from the U.S. Department of Commerce Office of Export Enforcement, the Treasury Department’s Office of Foreign Assets Control, and IRS Criminal Investigation.

This case underscores the U.S. government’s unwavering commitment to enforcing its customs laws and the severe consequences for those who choose to circumvent them.

Interested in learning more about CBP enforcement? Check out our upcoming webinar on the False Claims Act (FCA). We will discuss damages and criminal liability for making false claims to the government, whistleblower […]

By |2024-03-15T14:26:30-04:00March 15, 2024|Import, Penalty|Comments Off on Clothing Wholesaler Executive Avoids Paying Millions in Duties – Sentenced to 4 Years in Prison

Free Trade Agreements: Good or Bad?

I am still troubled by the Wall Street Journal lead article on October 4, 2010 with the headline "Recession-Weary Americans Sour on Free Trade." I asked myself why would Americans who live in an economy built successfully on the principles of capitalism and free enterprise be against international trade? My bold prediction is that 2011 will be the year that the Obama Administration successfully finalizes free trade agreements with South Korea, Panama, and Colombia, and then Congress passes laws approving them.

Go to Top