These charges are violations of the laws that govern importing and exporting goods. Federal law specifically describes customs protocol in detail, and a number of charges can be made if that protocol is violated.
The following are examples of situations where charges of import and export crime may be filed:
- You falsely classify goods
- You import or export goods without paying the necessary fines or dues
- You “re-land” or “transship” goods in order to avoid fines
- You smuggle goods into or out of the United States, including but not limited to gold
- You import or export illegal goods
Federal Statutes Related to Import and Export Crimes
Federal import and export laws are described in Title 18, Chapter 27, Statutes 451-455, of the US Legal Code. These laws describe the processes guiding the import and export of goods. Specifically, they state that it is a crime to falsify information (whether it’s a false classification, a false description of the import/export process, or a false declaration) in order to avoid dues, tariffs, fees, or regulatory processes, and/or in order to otherwise evade the laws guiding what is and is not allowed into the United States.
These laws affect people who are professionally involved in import and export, including import/export agents and managers, freight coordinators, commercial experts, manufacturers, and distributors. However, they also apply to individuals who, for whatever reason, import or export goods for either personal or professional reasons. This can be as small-scale as a personal collection of items, or as large scale as a massive manufacturing scheme.
The Legal Definition of Import/Export Crime
Statutes 541-551 of the U.S. Criminal Code set out the legal definition of import and export crime as the deliberate and knowing violation of the customs laws of the United States.
According to these statutes, it is a crime:
- To falsely classify goods in terms of weight/measure, quality, value, or the amount of fines or dues rightfully owed for their import/export.
- To import goods into the U.S. by means of any false statement, including declarations, invoices, letters, verbal statements, and/or affidavits. Importantly, this is a crime whether or not it results in paying less than the fully owed duties to customs.
- To be an “officer of the revenue” (ie, an IRS employee) and to knowingly allow the entry of goods for less than the amount due to customs.
- To “reland” or “transship” goods, meaning diverting goods in order to avoid customs fees or payments.
- To smuggle goods into the United States, or to buy, sell, or conceal smuggled goods.
- To smuggle goods into foreign countries, or to own, possess, or operate a vessel used to smuggle goods into foreign countries.
- To deposit goods in a boundary line between the United States and any foreign country in order to subvert the customs process.
- To fraudulently conceal, re-pack, hide, or move goods in any bonded warehouse in order to subvert customs, or to alter or deface marks or numbers on the goods for the same reason.
- To attach a false or forged customs seal to goods or to a vessel, warehouse, or package, or to remove or deface a genuine customs seal.
- To enter a vessel, vehicle, or bonded warehouse with the intent to unlawfully remove bonded goods, to actually remove those goods, or to receive or transport those goods.
- To falsely claim a refund or allowance from customs.
- To willfully conceal or destroy any invoice or papers relating to goods or merchandise imported into the United States, either in response to the demand for an inspection, or in an attempt to suppress evidence.
- To be an officer or employee of the United States who knowingly helps someone import, advertise, or deal in “obscene or indecent” publications, or publications that urge treason, insurrection, or threaten physical harm.
- To knowingly import, export, or attempt to import or export a stolen vehicle, vessel, aircraft.
- To construct or finance the construction of a tunnel that crosses the border between the United States and another country, or to attempt to do so. It is also illegal to know about that sort of tunnel being built on your land and not do anything about it.
- To use any constructed international tunnel to smuggle in any goods.
Import and export crimes are generally considered felonies under federal criminal laws. If it is proven that you violated any of the above statutes, you may be facing felony charges.
Charges of import and export crime may be brought in addition to, or in place of, charges for certain other related offenses, including:
Related Offense #1: Breaking and Entering a Carrier Facility
- The definition of breaking and entering a carrier facility is breaking the seal or lock of any carrier facility with the intent to commit larceny.
- A carrier facility is essentially any vessel or vehicle that contains interstate or foreign shipments. This includes railroad cars, trucks, ships, airplanes, pipelines, and any other vehicle or mechanism by which goods or merchandise are transported across state or international lines. Breaking and entering in this context means knowingly entering a sealed carrier facility with the intent to steal the contents inside.
- Example: Susan knew that there was a pharmaceutical company shipment coming through her town. She found the train car where the shipment was being held, and broke in to steal drugs. Susan is now liable for breaking and entering a carrier facility.
- If the contents of the carrier facility are pre-retail medical products, then the punishment for breaking and entering are increased to up to 30 years in prison. This is the result of the Safe Doses Act of 2012, which made it a separate crime to steal pre-retail medical products.
- Example: Let’s return to the case of Susan. After leaving the railroad, she took the drugs home with her and gave some to her friend. Her friend wound up overdosing, and Susan was caught soon after. The drugs she stole were actually pre-retail, so Susan was able to be charged under the Safe Doses Act, which carries a much higher statutory maximum sentence.
Related Offense #2: Illegally Exporting Munitions
- The definition of illegally exporting munitions is the attempt to export or the actual export of arms or munitions of war, in violation of the law.
- The export of munitions, arms, and/or any item that could ostensibly be used for war or defense by a foreign nation is very strictly regulated. One type of customs violation is the export or arms, munitions, or war items without proper license or permission from the U.S. government.
- Example: Robert’s company made a contract with an Iraqi middleman for a shipment of firearm parts. They exported the parts to the middleman and eventually to Iraq for two years. At the time, exporting any arms to Iraq without explicit permission from the U.S. government was illegal under the Arms Export Control Act and the International Emergency Economic Powers Act. Robert did not acquire any permission. The shipments were discovered, and Robert was caught. At that point, he was liable for the illegal export of munitions.
- It is important to remember that in addition to possible jail time and fines, if you are caught illegally exporting munitions, you will almost always be forced to forfeit the actual items and/or any profits you may have made from their export and/or sale.
Related Offense #3: Fraud
- The definition of fraud is falsifying or concealing an act, scheme, or fact, making a false statement, or making use of a false document.
- Fraud is a charge with many different applications. Essentially, charges of fraud may be applied if you attempt to cover up any fact, act, or scheme by any provable means, including but not limited to false statements and false documentation.
- Example: Benny wanted to import a series of diet supplements into the United States. However, he knew that some of the supplements would not be allowed in, and others would incur large customs dues. Therefore, he labeled the supplements as different substances, which would be allowed in, and would not incur dues. When this was discovered, he was charged with attempting to defraud the U.S. government.
Related Offense #4: Smuggling Gold
- The definition of smuggling gold is importing gold into the United States without declaring it to a Customs and Border Patrol officer.
- Like the import and export of munitions, the import of gold is regulated by certain laws. Though there is no immediate duty for importing gold, it must be reported to Customs, especially if it is valued over $10,000.00. Gold is specifically monitored by customs because unchecked gold import or export can be considered money laundering.
- Example: Genevieve had $20,000.00 worth of gold bars. She decided to bring them into the United States and did not declare them at customs. She was therefore liable to be charged with gold smuggling, no matter what she intended to do with the gold bars.
- It is very important to note that it is illegal to import gold into the U.S. from Iran or Sudan, under any circumstances.
What Agencies Detect, Investigate, and Prosecute These Crimes?
Import and export crimes can reach many different agencies and departments in the U.S. Government. In addition to United States Customs and Border Protection and United States Immigration and Customs Enforcement, investigation and prosecution of these crimes could involve the Department of Justice, the US Attorney’s Offices, the Department of the Interior, the Department of the Treasury, the Federal Bureau of Investigation, and more. Often, different departments will collaborate on task forces and initiatives in order to monitor, curb, and prosecute import and export violations.
What Are the Statutory Penalties if You Are Convicted of These Crimes?
Import and export crimes are very serious. Most carry statutory penalties of at least one year of prison time, and many carry much larger prison sentences. In addition, import/export crime usually involves forfeiture of any illegally obtained profits or property. Civil charges may also be brought against you, in place of or in addition to criminal charges. These charges can result in additional fines.
What Are Some of the Additional Consequences to Being Convicted?
If you are convicted of an import/export crime, you will most likely be a felon, which is a life-long impediment to your opportunities and rights. If you are a business person involved in import/export, your reputation will be tarnished, and you may very well be legally barred from re-entering your line of work. If you are not a United States citizen, you will almost certainly be deported, and any chance you have of obtaining U.S. citizenship will be, at the very least, severely harmed. In addition, the extremely steep fees and profit surrender orders involved in import/export criminal conviction may force you to declare bankruptcy, or otherwise negatively impact your finances and/or credit.
Legal Defenses to Federal Import and Export Crime
There are several strong legal defenses you can use to fight import and export criminal charges.
Defense #1: You did not actually violate customs law.
- One of the defenses for these charges would be that you did not, in fact, violate customs law. During the process of examining a possible customs violation, many calls are made by individual customs agents. Additionally, various prohibitions, tariffs, and dues change over time. Both of these factors may result in a mistaken charge of customs law violation.
- Example: Giovanni’s company imports goods from China into the United States. Recently, dues and tariffs increased on certain Chinese goods, including the ones Giovanni imports. He paid the previously set dues for his last shipment, and customs agents charged him with a violation. However, the new dues did not actually take effect until three days after Giovanni’s shipment came in, meaning that he was not liable for the additional dues, and did not violate customs law.
Defense #2: You did not knowingly violate customs law.
- A second defense for these charges would be that you did not knowingly violate customs law. The process of importing and exporting goes through many different steps, and information can get lost or confused along the way. Many customs violations can be traced to an unintentional clerical error at some stage in the process. If it can be proven that this was actually unintentional, and that the person being charged did not know about it, then an attorney can use this as a defense.
- Example: Andrea imports perfume into the United States. During the packing and shipping process, one of her foremen accidentally mislabeled a palate of perfume as window cleaner, for which the duties are much lower. When the customs agents inspected the palate, they found that it was mislabeled, and charged Andrea with fraud. However, Andrea was able to prove that this was a clerical error, about which she had no knowledge.
Federal import and export charges can be very serious, and have very serious consequences. The laws governing import and export are very complicated, and involve many different governmental agencies, offices, and organizations. Leaving the outcome of such a high-stakes, complex trial to chance could be disastrous. Experienced attorneys can help you through every phase of the process. They can represent your interests during questioning and interrogation, ensure a fair presentation of any investigatory findings, negotiate with the prosecution, and map out the best possible strategies for trial. Approaching an investigation and trial on your own leaves you vulnerable and liable to make dire mistakes. Our attorneys are well versed in the complexities of import and export law, and can bring their experience to the table to make the best possible case for you.
Call Us For Help…
Reach out about your case, and let us guide you. Our experienced criminal defense attorneys are well versed in the complexities of import/export law, and are here to offer their guidance. Do not hesitate to contact us if you’d like to confidentially discuss your case. We have law offices in your area, and are ready to help.
Recent Federal Import and Export Crimes In the News: (2019)
1. Michigan Man Sentenced for Unlawfully Importing and Distributing Misbranded Drugs
Wednesday, May 8th, 2019
Matthew Dailey of Royal Oak, Michigan, was sentenced to two years in prison for illegally importing kratom, a psychoactive substance, and selling it under the false claims that it could treat serious medical conditions. He was the owner and operator of Nomad Botanicals, an online business that sold kratom. Dailey admitted that he knowingly and fraudulently portrayed kratom to the FDA as incense, paint pigment, and various other substances not intended for human consumption. He was charged with and pled guilty to one count of Introducing Misbranded Drugs into Interstate Commerce and one count of Importing Merchandise Contrary to Law. As part of the plea, he forfeited $1,000,000.00 in illegal proceeds, and will serve two years in jail, plus three years supervised release.
2. Univar USA Inc. to Pay U.S. $62.5 Million to Resolve Allegations that it Evaded $36 Million in Antidumping Duties on Imported Chinese Saccharin
April 9th, 2019
Univar, a subsidiary company from Downers Grove, Illinois, agreed to pay the United States $62.5 million to settle allegations that it was negligent in importing 36 shipments of transshipped Chinese saccharin between 2007 and 2012. The saccharin was transshipped through Taiwan in order to evade anti-dumping duties that applied to all saccharin manufactured in China. This transshipment caused the evasion of around $36 million in duty payments to the US Government. The lawsuit alleged that Univar was grossly negligent for not taking all reasonable steps to vet their suppliers. The settlement was the largest recovery ever under 19 USC S 1592 (which governs the recovery of unpaid duties of this kind.)
3. New Hampshire Man Pleads Guilty to Trafficking in CITES-Protected Water Monitor Lizards
April 23rd, 2019
Derrick Semedo of Nashua, New Hampshire pled guilty to illegally trafficking more than 20 live water monitor lizards from the Philippines between March and December of 2016, in violation of US law and the CITES (Convention on International Trade in Endangered Species) Treaty. Monitor lizards are endangered species, and are specifically targeted in the illegal pet trade. Semedo admitted that in order to conceal the lizards from U.S. Customs authorities, he hid them in socks, which were then concealed in the back panels of audio speakers. Once the lizards were concealed, they were shipped to Massachusetts via commercial carriers. As part of his plea, Semedo admitted that he knew importing the lizards was illegal under both Philippines and U.S. law, and that he sold some of them to customers in Colorado, Connecticut, and New Hampshire. The case was part of Operation Sounds of Silence, which is an effort by the Department of the Interior’s Fish and Wildlife Service to prosecute those involved in the illegal import, export, and trafficking in endangered species. Semedo pled guilty to one count of wildlife trafficking, in violation of the Lacey Act.
4. Australian National Sentenced to Prison Term for Exporting Electronics to Iran
David Russell Levick, of Cherrybrook, NSW, Australia, pled guilty to four counts of violations of the International Emergency Economic Powers Act, which criminalizes knowing transactions with Iranian entities without a license from the U.S. Department of Treasury. While Levick was the general manager of ICM Components, an Australian company, he solicited purchase orders and business from a representative of a trading company in Iran. He then placed orders with U.S. companies on behalf of that representative, which the representative himself could not have directly purchased without U.S. government permission. At times, Levick used a broker in Florida in order to further conceal that the parts were ultimately intended for an Iranian company. He regularly and intentionally concealed the ultimate destination of the parts from manufacturers, distributors, shippers, and freight forwarders. In addition, he structured payments to avoid trade restrictions imposed on Iranian financial institutions by other countries. The items he procured or attempted to procure on behalf of the Iranian company between 2007 and 2008 included precision pressure transducers (sensor devices used in airplanes), emergency floatation system kits meant for helicopters, and mounted light assemblies, also meant for helicopters. Levick was indicted in February 2012, and was extradited to the United States in December of 2018. He was sentenced to 24 months in prison and a forfeiture of $199,227.00, which represents the total value of the goods involved in the illegal transactions. Following his prison sentence, he will be deported.
5. Chinese National Sentenced to Prison for Selling Counterfeit Computer Parts
February 15th, 2019
Ruiyang Li, a Chinese national, was sentenced to 54 months in federal prison for directing the shipment of counterfeit computer equipment into the United States through the Southern District of Texas. From 2007 to 2017, Li directed the shipments and sold the counterfeit equipment through several business entities and under several aliases. In order to evade detection by law enforcement, he set up accounts to send and receive payments that appeared publicly not to be connected, mislabeled shipments, altered destination addresses, and used multiple different forwarding companies across the U.S. Li was ultimately apprehended when he sold counterfeit equipment to an undercover agent. During the case, it was argued that because state and local governments rely on the sort of equipment he was counterfeiting for use in banks, hospitals, air traffic control, power plants, and other essential infrastructure, and because counterfeit parts are often not subject to stringent manufacturing requirements, Li’s actions constituted a significant health and safety risk to the United States. What he owes in terms of restitution to the victims of his trademark counterfeiting (including Cisco Systems, Hewlett-Packard, and Intel) will be determined in a separate trial at a later date. Li will be deported after serving his prison sentence.
Recent Federal Import and Export Crimes In the News: (2018)
1. 22 Charged with Smuggling Millions of Dollars of Counterfeit Luxury Goods from China into the United States
August 16th, 2018
A total of 22 defendants were charged with illegally smuggling millions of dollars of Chinese-manufactured goods into the U.S. through ports on the East and West Coasts. The defendants allegedly smuggled the goods into the U.S. in 40-foot shipping containers, disguised as legitimate imports. Their official charges included conspiracy to traffic and trafficking in counterfeit goods, conspiracy to smuggle and smuggling counterfeit goods, and money laundering conspiracy. The goods included counterfeit versions of name brand luxury brands, such as Louis Vuitton, Tory Burch, Michael Kors, Hermes, and Chanel.
2. Bassett Mirror Company Agrees to Pay $10.5 Million to Settle False Claims Act Allegations Relating to Evaded Customs Duties
January 16th, 2018
Bassett Mirror Company, a Virginia-based home furnishings supplier, paid the U.S. $10.5 million to settle allegations that the company violated the False Claims Act. The company was accused of falsifying statements on customs declarations to evade antidumping duties on bedroom furniture imported from China. Antidumping duties are set up to protect U.S. businesses against foreign companies and manufacturers “dumping” products on the market in the U.S. at below-cost prices. At the time of the alleged falsification, bedroom furniture was subject to an antidumping duty, while non-bedroom furniture was not. The DOJ alleged that between January 2009 and February 2014, Bassett Mirror Company deliberately mischaracterized their bedroom furniture as non-bedroom furniture in order to evade the duties. Note: this case was brought forward by a whistleblower, “Ms. Wells”. Under the whistleblower provision of the False Claims Act, Ms. Wells was able to share in the portion of the government’s recovery, and was granted approximately $1.9 million.
3. Dietary Supplement Ingredient Importers Arrested in Connection with Large-Scale Smuggling and Money Laundering Scheme
November 29th, 2018
Lynn Chau and Bao Luu of California were charged in connection with a scheme to smuggle dietary supplement ingredients into the U.S. from China. Pure Assay Ingredients Inc., Chau’s import company, was also charged, as were Alex Wang and Ivy He, Chinese citizens who worked for Pure Assay in Chengdu, China. They were indicted on charges of conspiring to deceive the FDA and Customs inspectors by mislabeling stimulants and other “questionable ingredients” as non-controversial substances, as well as assembling false shipments to fool the FDA into believing they had destroyed substances the FDA had barred from distribution (when, in fact, the substances had been shipped out and sold in the U.S.)
4. Connecticut Man Pleads Guilty to Trafficking in Endangered Sperm Whale Teeth
June 6th, 2018
John “Jake” Bell of Lakeville, Connecticut pled guilty to one count of wildlife trafficking in violation of the Lacey Act for illegally trafficking teeth from endangered sperm whales. He admitted that in November of 2004, while in the Ukraine, he acquired around 34 sperm whale teeth and sold them to a co-conspirator in Nantucket, Massachusetts for $11,600.00. He then smuggled them into the U.S. by shipping them in several boxes to an associate in Connecticut, from whom the co-conspirator retrieved them. The co-conspirator was convicted in 2010, after a jury trial, and was sentenced to 33 months in prison. In addition to those 34 teeth, Bell smuggled in excess of 49 pounds of sperm whale teeth into the U.S., valued at more than $26,000.00.
5. Pennsylvania Man Charged with Illegally Exporting Firearm Parts to Iraq
March 23rd, 2018
Ross Roggio of Pennsylvania, as well as Roggio Consulting Company, LLC, a firm he was associated with, were indicted for allegedly conspiring to illegally export firearm parts, firearm manufacturing tools, and defense services from the United States to Iraq, without the necessary U.S. Commerce Department and U.S. State Department licenses. Roggio and Roggio Consulting Company, LLC were charged with criminal conspiracy, illegal export of goods, money laundering, and violation of the Arms Export Control Act and the International Emergency Economic Powers Act. It is alleged that the items illegally exported included M4 Bolt Gas Rings MIL, firing pin retainers, rifling combo buttons, and “defense services” (aka assistance to foreign persons in the manufacturing of firearms.) Roggio and RCC were also charged with wire fraud for purchasing items from a U.S. company and providing that company with false information about where the items were ultimately going, as well as 27 counts of money laundering for bank transfers from Iraq and to accounts in Pennsylvania. For all of these charges combined, the maximum penalty is 705 years in prison, a term of supervised release following imprisonment, and a fine.
 S 27.541, US Criminal Code
 S 27.542, US Criminal Code
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 18 US Code , S 2117
 18 US Code, S 670
 22 US Code, S 401
 22 US Code, Entire
 19 US Code S 1592
 31 US Code S 5117
 12 US Code S 95a(2)