Blog
Federal Customs Fraud Defense
Contents
Federal Customs Fraud Defense: Import and Export Violations
International trade seems routine until Customs and Border Protection (CBP) or Homeland Security Investigations (HSI) shows up. Customs fraud—misrepresenting imports, evading duties, violating export controls—carries up to 20 years in federal prison and massive financial penalties. If your business imports or exports goods and your facing investigation, these charges can destroy your company and your freedom.
Types of Customs Fraud
False country of origin – Misrepresenting where goods come from (often to evade tariffs)
Undervaluation – Understating import values to reduce duties
Misclassification – Wrong tariff codes to pay lower rates
Smuggling – Bringing goods without declaration
Export control violations – Shipping restricted items without license
Sanctions violations – Trading with prohibited countries/entities
Key Statutes
18 USC 542 – Entry of goods by false statements: Up to 2 years
18 USC 545 – Smuggling goods into U.S.: Up to 20 years
18 USC 554 – Smuggling goods from U.S.: Up to 10 years
IEEPA violations – Export controls/sanctions: Up to 20 years
Wire/mail fraud – Often charged alongside customs offenses
Civil Penalties
Beyond criminal charges, customs violations trigger massive civil penalties:
Negligence: 2x unpaid duties
Gross negligence: 4x unpaid duties
Fraud: Domestic value of merchandise plus unpaid duties
Defense Strategies
Good Faith Reliance
Customs classification and valuation are complex. Reliance on customs brokers, trade counsel, or CBP rulings can negate criminal intent.
No Willfulness
Criminal customs fraud requires willful conduct. Mistakes, negligence, or misunderstanding of complex regulations may not rise to criminal level.
Voluntary Disclosure
CBP has a voluntary disclosure program. Proactive disclosure of violations can reduce or eliminate penalties and prevent criminal prosecution.
Act Now
Customs investigations can result in seizure of goods, denial of entry privileges, and criminal prosecution. Contact trade and criminal defense counsel immediately if your facing customs investigation.