Wisconsin importers pay $10M to settle customs fraud case

Two Wisconsin-based industrial products suppliers and their owners have paid more than $10 million to resolve allegations that they submitted fraudulent commercial invoices to avoid millions of dollars in customs duties owed on imports from China.

Precision Cable Assemblies Inc., which sell wire harnesses, battery cables and other wiring products, and Global Engineered Products, which sells power distribution products, submitted false invoices to U.S. Customs and Border Protection that significantly undervalued goods imported from China from 2016 to 2021, the Department of Justice announced last week. The value and the tariff rate of a product are the primary factors in determining the amount of import duty.

The government alleged that two Chinese suppliers sent invoices in electronic spreadsheet format to Precision Cable Assemblies and Global Engineered Products with the full, actual price of the goods imported. The companies altered the spreadsheets to reduce the prices by about 70% and then handed them to their U.S. customs broker, which unknowingly submitted the false invoices to CBP. The practice was especially fruitful for the companies after the Trump administration imposed additional duties on many Chinese goods in 2018.

Global Engineered Products paid CBP $4.2 million in lost duties from the undervaluation scheme. The defendants paid an additional $6 million to the Justice Department to resolve liabilities for alleged evasion of duties under the False Claims Act.