Federal officials tout work of Chicago-based Trade Fraud Task Force
The work of the new Chicago-based federal Trade Fraud Task Force was praised Tuesday, as a federal official said it recently surpassed $1 billion in recoveries, penalties, forfeitures and publicly charged losses since it was formed last August.
Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division spoke at a press conference inside a warehouse in Bensenville, where U.S. Customs and Border Protection has its Centralized Examination Station.
Standing in front of pallets of seized drones that were made by forced labor, McDonald called trade fraud “brazen thievery of America’s wealth and generosity.”
The U.S. attorney’s office for the Northern Illinois District is the lead prosecutor for the national task force, which was established by the Justice and Homeland Security departments in August.
It investigates material misrepresentations to the CBP, including transshipment, mislabeling and false declaration.
McDonald cited recent cases filed in Chicago in which people are accused of filing paperwork falsely claiming gold jewelry was imported from Singapore and Oman, when it really came from India and the United Arab Emirates. By doing so, they paid $51 million less in customs duties, according to a news release. One of the people charged was Narain Gulabani, owner of Naperville-based Barkha Wholesale Inc.
McDonald said companies can no longer show “willful blindness” to trade fraud. “If you ignore supply chain red flags to pad your margins, you will be held accountable,” he said.
He announced the government has developed a 31-page “A Resource Guide to Trade Fraud Enforcement” explaining trade fraud, including various types such as false country of origin and undervaluing goods, as well as fraud tied to the import of items made by forced labor.
“Assess your supply chains now,” McDonald said.
McDonald also noted that trade fraud can result in unsafe products being imported. One of the cases he cited was a $16.5 million judgment against a company that imported defective air conditioners and failed to tell the Consumer Product Safety Commission about it. The air conditioners caused fires, including one where a woman was killed.
Andrew Boutros, U.S. attorney for the Northern Illinois District, recalled a case from years ago when he was a young prosecutor, in which imported honey was falsely declared. It turned out to be adulterated with an antibiotic, used to treat sick bees, that was dangerous to humans, he said.
The $1 billion total cited by McDonald includes cases that were started before the interagency task force was created. The largest amount in it, a $549 million settlement agreement with aluminum extrusion company Perfectus, came as a result of cases filed beginning in 2015, according to federal court records. The settlement was made in May.