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Criminal Prosecutions, Convictions for Customs Duty Violations Down in FY 2012

January 30, 2013 by Tim Warren|Top News

Criminal convictions and prosecutions based on customs duty violations fell in FY 2012 compared to the previous year, according to data compiled by the Transactional Records Access Clearinghouse (TRAC). Convictions for FY 2012 (Oct. 1 2011-Sept. 30 2012), fell 12.5 percent from a year ago, while prosecutions in FY 2012 dropped 44.4 percent, according to TRAC. TRAC, run out of Syracuse University, acquires the data through Freedom of Information Act requests to each U.S. Attorney's Office, which are required to keep detailed records on the work of federal prosecutors. Despite some recent high-profile criminal cases, including the prosecution of San Diego Customs Association President Gerardo Chavez, the TRAC data show a long-term decline in criminal prosecutions and convictions for customs duty violations.

(The statistics are based on convictions and prosecutions filed by the U.S. attorney under the category of "Customs Violations - Duty". That category is defined by the Justice Department as "Violations of customs regulations relating to the payment of duty (may involve violations of 18 U.S.C. §§ 541, 542, 543, 1001 and related statutes)." According to TRAC, the assistant U.S. Attorney gives each referral a category "based upon the subjective judgment of the prosecutor on the nature of the offense(s)." Much of the customs duty enforcement is done through civil legal proceedings, which aren't captured in this data. See ITT's Online Archives 12111631 for summary of Gerardo Chavez's guilty plea.)

Long-Term Decline

The government reported 25 new prosecutions and 28 convictions categorized as customs-duty violations in FY 2012, said TRAC. Both numbers are declines from the numbers in FY 2011, in which there were 45 prosecutions and 32 convictions. Such prosecutions are down 30 percent and convictions are down 67.5 percent compared to the FY 2007 numbers. The TRAC data doesn't provide much more information on the specifics of the individual cases and some cases involving importing violations may not be criminally prosecuted under customs duty violations criminal statutes . Immigration and Customs Enforcement (ICE) didn't comment.

This decline may point to a changing consideration for the benefits of a criminal prosecution compared to other methods of recovering lost revenue and preventing illegal entry of goods, said Kelly Herman, a lawyer at Venable. "There's a whole range of things on the civil side of it that probably gives them a better redress and have a greater likelihood of recovery or are easier to deal with than going through the criminal route," she said. Criminal prosecutions are probably only reserved for the most egregious violators, because the referring agency also has to convince the Justice Department to prosecute, said Herman. "Whereas they are self-administered if they are going to do it civilly, they have the ability to do all of that themselves," she said.

Criminal prosecutions for these kind of violations may be "a lot of work for not a lot at the end," Herman said. Presumably, in a criminal case for customs duty violations the goods involved would be seized or excluded from the U.S., meaning the additional pursuit of a criminal case would only be really worth it for the most habitual offenders or the most egregious instances, she said.

FY 2012 Convictions

The top lead charge for customs duty violation convictions in FY 2012 was smuggling goods into the U.S. (18 USC 545), which had 10 counts this year. The next most frequent lead charge for new convictions was entry of goods by means of false statements (18 USC 542), with four counts. Other charges with more than one conviction this year were: three counts of smuggling goods from the U.S. (18 USC 554), three counts of bulk cash smuggling into or out of the U.S. (31 USC 5332) and two counts of fraud/false statements or entries generally (18 USC 1001). The lead charge is determined by the assistant U.S. attorney assigned to the matter and is based on what the federal prosecutor considers to be the most important charge, according to TRAC.

ICE was named as the lead investigative agency for the largest number of convictions on customs-duty violations, accounting for 71.4 percent of the convictions. The Western District of New York (Buffalo) had the most convictions, with seven, in FY 2012, while the Central District of California (Los Angeles), Southern District of Florida (Miami) and the Southern District of Texas (Houston), each saw three convictions.

FY 2012 Prosecutions

Seven of the new prosecutions in FY 2012 included a lead charge of smuggling goods into the U.S. (18 USC 545), which was the top lead charge in the year, said TRAC. Bulk cash smuggling into or out of the U.S. (31 USC 5332) was the next most-used lead charge, with three counts in FY 2012 prosecutions, and smuggling goods from the U.S. (18 USC 554) was the lead charge in three prosecutions. ICE was the lead agency in 64 percent of the prosecutions while CBP was named as the lead agency in 12 percent. The Western District of New York and Southern District of Texas, where five prosecutions were filed each, were tied for the most active judicial districts for customs-duty violations prosecutions for the year.