A decision by the Supreme Court of the United States to not hear the case of an importer held personally responsible for false entries means that a lower court ruling stands. A whole class of individuals can now be personally at risk of prosecution by Customs and Border Protection.
In the case U.S. v. Trek Leather Inc. and Harish Shadadpuri, the U.S. held that seventy two entries had deliberately misdeclared valuations. Customs pursued action against Mr. Shadadpuri, but he claimed that as president and sole shareholder, he was not the importer of record, Trek Leather was. The Court of Appeals for the Federal Circuit (CAFC) felt otherwise, ruling that they did not need to pierce the corporate veil to hold him personally accountable for gross negligence.
What this means is that CBP, with the precedent now set by the CAFC, can pursue remedies both civil and criminal not just against a company, but against a specific person or persons who they feel were involved in causing goods to be entered with errors. You would assume this would only be used in the most egregious of cases, but there is nothing to preclude CBP from using it whenever they choose.
Who is now at risk? Import managers, compliance managers, corporate counsels, even business owners themselves…anyone whose job responsibility or description includes “introducing goods into U.S. commerce,” whether defined as such or not.
Importers and individuals in their employ are strongly encouraged to consult with both their attorneys and liability insurance carriers to ensure that safeguards and policies are in place to protect individual employees, owners, officers and directors.