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Study identifies trade fraud as growing problem

| Jul 31, 2018 | Federal Crimes

A global marketplace means that many products in Texas come from foreign countries. Unfortunately, trade fraud has become a widespread problem, according to a recent study. False records allow companies to avoid import duties, denying the government millions of dollars in revenue, and fake goods sometimes endanger consumers. From 2000 to 2016, federal cases against criminal importers rose by 900 percent.

The law professor and attorney who wrote the study, which recently appeared in the Oregon Review of International Law, said that tax evasion motivates the bulk of fraudulent importers. Illegal activities, however, sometimes bring fake or mislabeled products into the country that could cause health problems. In one case, fish sold as grouper or flounder was actually catfish from Vietnam containing harmful antibiotics.

Identifying and prosecuting fraudulent importers have proven difficult. The massive amount of goods entering the country, valued at $2.71 trillion every year, makes it physically impossible for federal enforcement agencies to track or inspect everything. The researchers recommended that centralized databases about investigations and shipping records could aid investigators operating within separate agencies. The prosecution of cases under the False Claims Act could serve as a deterrent as well. Stiff penalties enabled by the FCA and the potential to convince people to provide testimony could increase criminal prosecutions, according to the authors.

A person confronted by accusations of white-collar crimes involving computer crimes and fraud might want advice from an attorney familiar with federal crimes. An attorney could explain the allegations and severity of possible penalties. Legal representation could make a defendant aware of rights before answering questions from investigators. An attorney might also have an opportunity to challenge evidence and question claims that the client knowingly participating in a criminal operation.

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