CIT Orders Maximum Allowable Penalty on Customs Broker for Import Violations

The Court of International Trade ordered a former customs broker to pay the $30,000 maximum allowable penalty for broker violations of the customs regulations, in a decision issued March 29 (here). Paul Puentes, a Los Angeles-based broker whose license was revoked in 2012 for failure to file a triennial report and pay the associated fee (see 12120527), pocketed Merchandise Processing Fees from a client, failed to file entry summaries or filed them late, and misrepresented the importer of record on entries imported on his own behalf, CIT said.

Puentes did not contest CBP’s penalty notices or defend himself in court, so CIT found him in “default” and automatically took the government’s allegations to be true. The only matter left for the court was the amount of penalty that should be assessed. The court found that, given the severity of the violations, the $30,000 maximum allowed by 19 USC 1641(d) was justified. The penalty “is the result of multiple serious statutory and regulatory violations, concerning a substantial number of entries (and on behalf of numerous clients), over an extended period of time,” CIT said. “Further, many, if not all, of the violations were intentional.”

CBP became aware of some of the violations after one of Puentes’s clients, Florexpo, filed a prior disclosure with CBP. Puentes had been sending copies of entry summaries to Florexpo that reflected the full value of the imported merchandise, and Florexpo had been paying Puentes the full amount of MPF owed. But after receiving payment, Puentes would submit a different entry summary to CBP that reflected lower declared values, collecting about $6,437.05 more in MPFs from Florexpo than he paid to CBP on the company’s behalf.

Puentes also filed entry summaries past the 10-working day deadline for some 250 entries from seven separate clients between September 2008 and February 2009, and did not file entry summaries at all for another 58 entries during that time, CIT said. Finally, between April 2009 and April 2010, Puentes filed entry summaries for 43 entries, listing WorldFresh Express as the importer of record, but WorldFresh had not authorized Puentes to clear those entries on its behalf. The actual importer of record on the 43 entries was Puentes himself, CIT said.

(U.S. v. Puentes, Slip Op. 17-33, CIT # 14-00310, dated 03/29/17, Judge Ridgway)