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

Anti-Circumvention, EAPA, Dumping Duties & the Spreadability of Cases

This one-hour webinar will provide an overview of AD/CVD, U.S. Customs and Border Protection’s enforcement actions and investigative process, as well as a review of EAPA regulations and provide insights on best practices to protect your company in this contentious area of U.S. Customs and Border Protection enforcement.

Background on EAPA

The Enforce and Protect Act of 2015 (EAPA) allows U.S. Customs and Border Protection (“CBP”) to investigate whether a company has evaded anti-dumping and countervailing (AD/CVD) duties in an on-the-record investigation. EAPA enforcement has increased considerably in recent years. In fact, in Fiscal Year 2020, CBP collected $287 million in duties via EAPA enforcement – this is a 500 percent increase since the beginning of the EAPA program in FY 2017.

On April 21, 2021 at 12:00 PM, Jennifer Diaz and David Craven will present a webinar on Anti-Circumvention/EAPA/Dumping Duties & the Spreadability of Cases.

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By |2021-07-23T16:40:49-04:00April 19, 2021|AD/CVD, Best Practices, China, Enforcement, Import, International Trade, Pre-compliance, Reasonable Care, U.S. Customs and Border Protection (CBP)|Comments Off on Anti-Circumvention, EAPA, Dumping Duties & the Spreadability of Cases
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