Customs Seize Counterfeit Credit Cards

By Import

Customs seized counterfeit credit cards from a man on a tourist bus

A male Mexican national was arrested last month for attempting to smuggle a number of fraudulent credit cards through the Dennis DeConcini port.

U.S. Customs and Border Protection officers conducting an inspection of a tourist bus selected Leonardo Daniel Robles Castro, 23, of Hermosillo, Sonora, Mexico, for further inspection. During the search, officers found and seized two packages of counterfeit credit cards (79 total) along with a fraudulent driver’s license. Robles was arrested and referred to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

CBP officers working at Arizona’s ports are assigned to the Office of Field Operations, the primary organization within Customs and Border Protection tasked with an anti-terrorism mission. CBP officers screen all people, vehicles and goods entering the United States while facilitating the flow of legitimate trade and travel. Their mission also includes carrying out border-related duties, including narcotics interdiction, enforcing immigration and trade laws, and protecting the nation’s food supply and agriculture industry from pests and diseases.


Project Honeygate: One of the Largest Anti-Dumping Cases in US History

By Import

Five individuals and two domestic honey-processing companies have been charged with federal crimes in connection with a U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI)-led investigation surrounding illegal importations of honey from China.

The charges assert that the Chinese-origin honey was misdeclared as other commodities upon importation into the United States and transshipped through other countries to evade anti-dumping duties. Altogether, the seven defendants allegedly evaded anti-dumping duties totaling more than $180 million.

According to industry experts, anti-dumping circumvention schemes like the one announced today create a divergent market which negatively affects legitimate business. To combat this, HSI and U.S. Customs and Border Protection (CBP) have stepped up efforts regarding commercial fraud investigations that focus on U.S. economic and health and safety interests.

The charges represent the second phase of an investigation led by HSI. In June 2011, an HSI undercover special agent assumed the role of the director of procurement at Honey Holding I Ltd., which by then was cooperating with the investigation.

Honey Holding, doing business as Honey Solutions, of Baytown, Texas, and Groeb Farms Inc., of Onsted, Mich. – two of the nation’s largest honey suppliers – have both entered into deferred prosecution agreements with the government. Honey Holding has agreed to pay $1 million and Groeb Farms has agreed to pay $2 million in fines. Both companies have also agreed to implement corporate compliance programs as part of their respective agreements.

“These businesses intentionally deprived the U.S. government of millions of dollars in unpaid duties,” said ICE Deputy Director Daniel Ragsdale. “Schemes like this result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations, with some even being put out of business. We will continue to enforce criminal violations of anti-dumping laws in all industries so American and foreign businesses all play by the same rules.”

The individual defendants include three honey brokers, the former director of sales for Honey Holding, and the president of Premium Food Sales Inc., a broker and distributor of raw and processed honey in Bradford, Ontario.

In December 2001, the Commerce Department determined that Chinese-origin honey was being sold in the United States at less than fair market value, and imposed anti-dumping duties. The duties were as high as 221 percent of the declared value, and later were assessed against the entered net weight, currently at $2.63 per net kilogram, in addition to a honey assessment fee of one cent per pound of all honey.

In 2008, federal authorities began investigating allegations involving circumventing anti-dumping duties through illegal imports, including transshipment and mislabeling on the supply side of the honey industry. The investigation resulted in charges against 14 individuals, including executives of Alfred L. Wolff GmbH and several affiliated companies of the German food conglomerate. The defendants were charged with allegedly evading approximately $80 million in anti-dumping duties on Chinese-origin honey. Authorities seized and forfeited more than 3,000 drums of honey that illegally entered the United States.

The second phase of the investigation, announced on February 20, 2013, involves allegations of illegal buying, processing and trading of honey that illegally entered the United States on the demand side of the industry. Some of that honey was adulterated with antibiotics not approved by the Food and Drug Administration (FDA) for use in honey. None of the charges allege any instances of illness or other public health consequences attributed to consumption of the honey. The investigation is continuing.

“Trade fraud can have significant implications for the U.S. economy and consumers,” said CBP Chief Operating Officer Thomas S. Winkowski. “These products take jobs away from American workers and frequently violate U.S. health and safety standards, potentially endangering the public. CBP is committed to fighting these fraudulent actors alongside our government partners.”


US and Mexico Gear Up for Christmas with Operation Holiday Hoax

By Customs IP Enforcement, Export, Import, Intellectual Property, International Business, International IP

The National Intellectual Property Rights Coordination Center (IPR Center) announced the kickoff of Operation Holiday Hoax, an effort to track down those who are selling counterfeit and pirated products this holiday season.


The U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)–led IPR Center is working with partners U.S. Customs and Border Protection (CBP), the U.S. Postal Inspection Service, the Consumer Product Safety Commission, and the government of Mexico to target stores, flea markets and swap meets involved in the importation, distribution and selling of counterfeit and pirated products in cities across the United States and in Mexico. Additionally, CBP officers will be conducting inspections and seize counterfeit merchandise at various U.S. ports of entry.

“The counterfeiting and piracy epidemic continues to spread around the world,” said IPR Center Director Lev Kubiak. “Our partnership with the government of Mexico and the rest of our partners at the IPR Center show that this is a problem that affects everyone in the world, not just the United States. Together, we will continue to deliver blow after blow to criminals worldwide making a positive impact on American jobs here at home.”

This is the third year that the IPR Center has conducted Operation Holiday Hoax. Last year’s operation led to the seizure of more than 327,000 counterfeit and pirated items with a manufacturer’s suggested retail price worth an estimated $76.8 million. In 2009 the operation netted more than $26 million worth seized goods.

“The protection of intellectual property rights is one of CBP’s top priority trade issues,” said Assistant Commissioner for International Trade Al Gina. “Operations like this protect American businesses and consumers. CBP works daily to keep counterfeit goods out of the U.S. and to bring producers and distributors of these goods to justice.”

Last year, Mexico’s Tax Administration Service conducted 845 inspections in the main ports of entry, executed 160 search warrants nationwide and seized 23.8 million counterfeit and pirated items including 10 tons of used clothing, cigarettes, electronics, tools and DVD’s. The estimated value of the seized goods was 96.7 million pesos, or $7.1 million.

Holiday Hoax began Nov. 26 and is scheduled to run until Dec. 26. During that time federal and local law enforcement officers will seize products such as perfume, holiday lights, electronics, clothing and DVD’s. As in years past, most of these items are ordered online as part of the holiday shopping season.

Source: ICE


Customs Seizes $29K in Unreported Currency

By Blog, Export, Import, International Business

U.S. Customs and Border Protection (CBP) officers at Washington Dulles International Airport (IAD) seized $29,000 Monday from a Ghanaian woman for violating federal currency reporting regulations.

The passenger, who arrived to Dulles from London, declared possessing less than $10,000. While examining her bags, CBP officers discovered a large sum of U.S. currency in a zippered compartment of her handbag. The final count was $29,000.

There is no limit to how much currency travelers can import or export; however federal law requires travelers to report to CBP amounts exceeding $10,000 in U.S. dollars or equivalent foreign currency.

CBP officers seized the $29,000 and advised the traveler how to petition for the return of her seized currency.

“Travelers who refuse to comply with federal currency reporting requirements run the risk of having their currency seized, and may potentially face criminal charges,” said Christopher Hess, CBP port director for the Port of Washington. “The traveler was given the opportunity to truthfully report her currency. The easiest way to hold on to your money is to report it.”

In addition to narcotics interdiction, CBP routinely conducts inspection operations on arriving and departing international flights and intercepts currency, weapons, prohibited agriculture products or other illicit items.

Travelers are encouraged to visit CBP’s Travel website to learn rules governing travel to and from the U.S. ( Travel )

The Privacy Act prohibits releasing the traveler’s name since she was not criminally charged.



Officers Seize 17 Vehicles and Assess $93,500 in Fines

By Export, Import, International Business

Recently, U.S. Customs and Border Protection officers working outbound operations at the Santa Teresa port of entry seized 17 vehicles and assessed penalties totaling $93,500.

The discovery was made when CBP officers, conducting routine outbound enforcement operations in the vehicle export facility, detected issues with the paperwork linked to several vehicles destined for Mexico. Further investigation resulted in the seizure of 17 vehicles attempting to circumvent the CBP exportation process by presenting fraudulent export paperwork. Each of the 17 violations carries a fine of $5,500. A total of $93,500 in fines and penalties were assessed against the exporter. All 17 vehicles were also seized by CBP.

“This entire episode is curious because there was really nothing to gain here other than a small savings in time,” said CBP Santa Teresa assistant port director Fred Hutterer. “CBP does not charge a fee to process vehicles for export.”

The CBP vehicle export process is fairly simple. An exporter presents his original certificate of title or certified copy of the certificate of title and the CBP export cover sheet with the vehicle’s information (VIN/make/model) to CBP officers. The copies are date and time stamped which initiates the 72-hour requirement of the vehicle to remain in the United States prior to the formal export. During this 72-hour window CBP performs a series of checks to make sure the vehicle is eligible for export. After the 72 hours have elapsed the exporter will present the original title and the vehicle to CBP for verification. Once CBP determines that all requirements have been met the vehicle can be exported.

CBP officers at the Santa Teresa port process approximately 36,000 vehicles for export annually. The Santa Teresa port of entry is the only designated vehicle export location in the El Paso area.


Members of Counterfeit Nike Sneaker Ring Face Up to 5 Years in Prison and $250,000 Fine

By Customs IP Enforcement, Export, Import, Intellectual Property, International Business, International IP, News

Registered Trademark of Nike

Five individuals have pleaded guilty to conspiring to import misclassified merchandise. Each faces up to five years in federal prison and a $250,000 fine. This case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

“The trademark laws in the United States were created to protect the investment of American manufacturers such as Nike as well as consumers,” said U.S. Attorney William J. Hochul Jr., Western District of New York. “These laws are designed to create a level playing field for businesses and protect consumers who might unwittingly purchase inferior counterfeit goods. Our office will continue to aggressively enforce customs laws for the benefit of American businesses and those who purchase their products.”

“Selling counterfeit goods is stealing,” said James C. Spero, special agent in charge of HSI Buffalo. “HSI is committed to ensuring the legitimate copyright holders are protected from individuals who are only motivated by greed. People and organizations which produce and sell counterfeit products undermine the U.S. economy; create inferior and sometimes dangerous products; and jeopardize public safety.”

Xiao Cheng Lin, 50, and his wife, Ling Zhen Hu, 51, both of New York, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to import misclassified merchandise. Hu, a native of China, worked for an individual who imported thousands of pairs of sneakers from China that bore the Nike “swoosh” logo and Nike labeling, but were not genuine Nike sneakers. Hu then negotiated the sale of large quantities of the mislabeled sneakers to Malik Bazzi, 44, of Montreal, who then sold them to customers throughout the United States — including in Buffalo — via his warehouses in Manhattan and Brooklyn. Bazzi is currently scheduled to be sentenced Feb. 1, 2013. Hu admitted that she negotiated the sale of 7,500 pairs of sneakers to Bazzi.

Lin, also a native of China, worked with his wife, delivering the 7,500 pairs of sneakers to Bazzi. The HSI investigation revealed that Bazzi’s customers then sold the counterfeit Nike sneakers on the street and in retail stores to customers for about half the price of genuine Nike sneakers.

As part of their plea agreements, both Lin and Hu agreed to abandon any claim to more than $600,000 and dozens of pairs of counterfeit sneakers seized from their New York residence following their 2007 arrest.

The defendants were arrested along with 21 others. To date, 20 of the defendants have been convicted.

On Sept. 5, 2012, LaKeith Fowler, 32, of Dallas, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Fowler, one of Bazzi’s customers, purchased and sold approximately 12,000 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Fowler sold the sneakers in a retail store he owned in the Dallas-area. As part of his plea agreement, Fowler agreed to forfeit two bank accounts to the government which contain over $44,000 in deposits. The accounts were used to conduct counterfeit sneaker transactions.

On Sept. 7, 2012, Davion Briant, 37, of Milwaukee, also pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Briant, another of Bazzi’s customers, purchased and sold approximately 4,500 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Briant owned a retail store in the Milwaukee-area where he sold the counterfeit sneakers.

On Sept. 10, 2012, Hussien Sara, 30, of New York, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Sara worked in Bazzi’s warehouses where, on behalf of Bazzi, he took delivery of over 13,000 pairs of counterfeit sneakers from several suppliers, including Hu and Lin. In addition, Sara assisted in packaging the sneakers for shipment to Bazzi’s customers located throughout the United States.

Lin and Hu will be sentenced Jan. 24, 2013; Fowler Dec. 14, 2012; Briant Jan. 7, 2013; and Sara Jan. 11, 2013. All will be sentenced by Judge Arcara in Buffalo.


Hong Kong Jewelry Exporter Faces Nearly $2 million in Fines and Restitution

By Blog, Export, Import, International Business

Recently, a Hong Kong-based jewelry exporter pleaded guilty to customs fraud charges and faces nearly $2 million in fines and restitution in a scheme discovered by U.S. Customs and Border Protection’s (CBP) Regulatory Audit Unit and investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Fai Po Jewellery (H.K.) Co., LTD, admitted to intentionally submitting false invoices to the government in connection with the importation of merchandise in order to avoid paying more than $1 million in customs duties. The company was also ordered to pay an $800,000 criminal fine and restitution of $1,017,737. Additionally, the company was ordered to pay the cost of the investigation in the amount of $144,324 and was placed on three years’ probation.

HSI special agents found that from early 2007 to late 2009, Fai Po enclosed false invoices in their direct shipments to U.S. purchaser ShopNBC while sending the actual full value invoice to the purchaser by email. Fai Po advised the purchaser to ignore the invoice enclosed in the shipment because it was there only to avoid customs clearance issues.

Since Fai Po was acting as both the exporter and importer, the company was responsible for customs duties, not the U.S. purchaser. The purchaser paid the higher amount listed on the true invoice, while Fai Po declared to the government the lower value on the fraudulent invoice. The purchaser was not aware of Fai Po’s scheme and didn’t receive any benefit from it.

“A few deliberate pen strokes on a customs declaration form amounted to the theft of more than $1 million from the American people,” said Brad Bench, special agent in charge of HSI Seattle, who oversees investigations in Alaska. “The defendant apparently believed its actions would go unnoticed, but it didn’t count on CBP’s ability to detect this anomaly or HSI’s commitment to holding those who commit customs fraud accountable.”

The fraud was detected by CBP when an audit revealed a discrepancy between the actual value of the gold jewelry shipment and what was stated on the fraudulent invoices.

Under the terms of probation, Fai Po is required to appoint a responsible corporate officer who will be required to prepare and submit quarterly reports to the U.S. Probation Office to ensure that no similar conduct occurs in the future.


Customs Announces Simplified Entry Pilot to Enhance Cargo Security

By Import

U.S. Customs and Border Protection announces the delivery of the first phase of Cargo Release, known as Simplified Entry, in the Automated Commercial Environment. Simplified Entry provides importers with the chance to file a streamlined set of data earlier in the filing process providing more information earlier in the process and reduces the time needed for cargo to be released into the stream of commerce.

“The Simplified Entry Pilot is an outstanding example of what can happen when the government and the private sector co-create trade programs,” said Acting Commissioner, David V. Aguilar. “Simplified Entry will enhance cargo security, reduce cycle times, improve productivity, help eliminate redundant data transmissions, and potentially reduce costs.”

CBP has received the first Simplified Entry filings at each of the three pilot ports of Indianapolis, Chicago and Atlanta, as part of the pilot test that began May 29, 2012. To date, six of the nine pilot participants selected in December of 2011 have begun filing Simplified Entries.

Simplified Entry streamlines the release of goods and enhances cargo security. It segregates the filing of the transportation information from the filing of the entry information. This allows for the earlier filing of entry information. This, in turn, allows CBP personnel to apply more time and resources to higher risk shipments.

For information on Simplified Entry and other trade developments, visit the Trade website. ( Trade )


CBP Officers Pull the Plug on Unsafe Trees

By Import

As part of a joint effort with investigators from the Consumer Product Safety Commission (CPSC), U.S. Customs and Border Protection (CBP) officers from the Port of Detroit targeted and seized three shipments of LED lighted trees after they were found to have undersized wiring and insufficient strain relief making them an electrical and flammability hazard. The total retail value of the trees was $9800.

The container, originating from China and destined for Michigan, arrived into the United States from Canada via commercial train at the International Falls Port of Entry on June 1. Upon arrival in Detroit, the shipment was examined by CBP officers who, in turn, sent product samples to the CPSC for analysis. A review of the samples by CPSC determined the products to be unsafe for the American consumer market.

“CBP officers work diligently to detect and prevent the importation of fraudulent merchandise that could cause serious injury to consumers,” said Roderick Blanchard, Port Director.

CBP in Detroit continues to work with Immigration and Customs Enforcement, the Consumer Product Safety Commission and other enforcement agencies and organizations to combat the illegal import of counterfeit goods which pose significant health and safety dangers to the American public.

PRACTICAL TIP: Top ROI for Your Legal Dollars

By Blog, Customs IP Enforcement, Export, FCPA, Foreign Trade Zones (FTZ), Grab Bag, Import, Intellectual Property, International Business, International IP, Internet / eCommerce, ITAR, News

Based on our experience, some of the best uses of resources on legal advice and assistance for businesses and entrepreneurs (from a “bang for your buck” perspective) are:

  • Succession Planning. This includes buy-sell and similar provisions in company documents to deal with death, divorces, and other departures of co-owners, and also includes an updated estate plan such as a will and advance directives to ensure your legacy.

The benefits one can obtain from these legal mechanisms and protections, which generally cost less than $2,000, can pay for themselves many times over.