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Ignoring Signs of False Import Invoices Nets $1 Million Penalty for Wholesaler

Tuesday, October 10, 2017
Sandler, Travis & Rosenberg Trade Report

A U.S. garment wholesaler has agreed to pay $1 million in damages and take other steps to settle civil fraud claims brought under the False Claims Act. 

According to a press release from U.S. Immigration and Customs Enforcement, an importer of women’s apparel manufactured in China presented false and fraudulent invoices to U.S. Customs and Border Protection showing prices that were discounted by 75 percent or more to avoid customs duties. The wholesaler, which was the importer’s biggest customer, admitted that it aided this scheme by repeatedly ignoring warning signs that the importer’s irregular business practices were highly suggestive of fraud.

In addition to the penalty the company has agreed to implement a written compliance policy that will include measures to educate its employees on identifying red flags for fraud in import transactions, to monitor the conduct of its business partners who act as importers of overseas goods, and to report all potentially fraudulent conduct to CBP. 

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