fraud

Co-authored by:
Jonathan Tycko – Tycko & Zavareei LLP
Jennifer Diaz – Diaz Trade Law

Introduction

A company you work for, or maybe a competing company, is committing customs fraud.  The company is lying about the value of the products it is importing, using improper HTS codes to avoid duties, or importing products that have been transshipped to evade tariffs.  What can you do about it?  One option is to file what is known as a “qui tam” lawsuit under the federal False Claims Act.  A qui tam lawsuit is one that is brought by a private citizen or company against defendant that owe money to the government.  When a qui tam lawsuit is successful, the party that initiated the case—called a “relator”—is entitled to a substantial monetary reward, ranging between 15% and 30% of the amount recovered for the government.  A qui tam lawsuit has another major advantage: it engages the U.S. Department of Justice (“DOJ”) in the case, and typically results in the opening of an investigation by DOJ into the allegations made in the case.  So, a qui tam lawsuit is a means of bringing allegations of customs fraud to the attention of the government, and triggering a serious inquiry by the government into those allegations.

False Claims Act qui tam cases can be complicated, and many factors go into whether such a case can be successful.  In this article, we do not address the substance of the cases themselves.  Instead, we address a question we are commonly asked […]