1. Customs Investigations and Criminal Penalties

2. 2 Signs that Customs is Contemplating a Criminal Investigation 1.Has a Customs Summons been issued? 2. Whom within Customs has the client been dealing with? 3. When the importer requests a meeting, who will meet with them? 4. Is Customs responding to requests for information?

3. 3 Criminal Penalties 18 U.S.C. §542 – Customs major criminal fraud statute. Civil counterpart is 19 U.S.C. §1592. Elements: 1.Entry, introduction or attempted entry or introduction 2.Merchandise 3.Into the commerce of the United States 4.By means of any false statement, written or oral or false or fraudulent invoice, declaration, affidavit letter, paper, practice or appliance.

4. 4 Criminal Penalties General Comments on §542 1. No loss of revenue is required. 2. Materiality is not found in the language of the statute. However, the court created it through case law. 3. Requires general criminal intent. 4. Penalty – 2 years, $250,000 ($500,000 for corporations).

5. 5 Criminal Penalties 18 U.S.C. §545 Whoever knowingly and willfully, with intent to defraud the United States, smuggles, or clandestinely introduces or attempts to smuggle or clandestinely introduce into the United States any merchandise which should have been invoiced, or makes out or passes, or attempts to pass, through the customhouse any false, forged or fraudulent invoice or other documents or paper; or Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or receives, conceals, buys, sells or in any manner facilitates the transshipment, concealment or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law

6. Criminal Penalties 18 U.S.C. §1001 (General False Statements): (a)Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully – (1) falsifies, conceals or covers up by any trick, scheme or device, a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry;

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