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Customs: "Gift" and a falsely low declared value

On Lawyer & Legal » Consumer Law & Fraud

7,237 words with 3 Comments; publish: Thu, 16 Sep 2004 15:13:00 GMT; (800156.01, « »)

A client of mine regularly gets requests from customers outside

of the U.S.A. to mark purchases as "gifts" and to use a very

low price cost for the goods.

The item shipment includes the eBay auction information,

and it would be easy to determine the real sale price if

some customs opened it.

The client just got out of a Federal "jail" (he said it

had ping pong and pool tables), and is freshly on probation

for white collar crimes in a previous business and he has

a probation officer popping in unannounced.

When I saw the traffic asking for "Gift" and a false price,

I recommended to the client that he not mark a false price

because of his precarious position.

He wrote back:

# Why would anyone in this country give a care about how much tax

# a foreign country would charge their citizen to discourage them

# from purchasing American foreign goods? Even a U.S. postmaster

# would encourage very low declarations. Every shipper knows to

# do so, unless they're an upstart shipper.

This post is my due diligence check.

Is it illegal in the U.S. to do this practice?

Are the customs declarations a U.S. legal form even

if the shipping is UPS?

What are the chances it will cause him a problem?

His PO is requiring money in/out reports per month, which are

unaffected by this, and the PO is very unsavvy about computers.

It does seem to be a common shipping practice to declare a

false value. Even Bloomingdale's wrote a falsely inflated

price on a certificate for the value of some jewlry that I

bought, an entirely domestic transaction.

Thanks.

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  • 3 Comments
    • >A client of mine regularly gets requests from customers outsideof the U.S.A. to mark purchases as "gifts" and to use a verylow price cost for the goods.The item shipment includes the eBay auction information,and it would be easy to determine the real sale price ifsome customs opened it.

      What would the client's legal position be if on getting such a

      request he aborted the eBay transaction and refused to sell to that

      buyer (ever)? That's what I'd want to do to stay out of trouble,

      but I'm not a lawyer.

      Would it matter if he stated he wasn't going to lie on customs forms

      in the eBay item description and that such a request would abort

      the sale?

      Gordon L. Burditt

      #1; Thu, 16 Sep 2004 19:36:00 GMT
    • "Anthony Needledic" <AN.consumerlaw.questionfor.info.hotmail.com> wrote in message

      news:h_WdnaKH7NKYjdfcRVn-qQ.consumerlaw.questionfor.info.giganews.com... A client of mine regularly gets requests from customers outside of the U.S.A. to mark purchases as "gifts" and to use a very low price cost for the goods. The item shipment includes the eBay auction information, and it would be easy to determine the real sale price if some customs opened it. The client just got out of a Federal "jail" (he said it had ping pong and pool tables), and is freshly on probation for white collar crimes in a previous business and he has a probation officer popping in unannounced. When I saw the traffic asking for "Gift" and a false price, I recommended to the client that he not mark a false price because of his precarious position. He wrote back: # Why would anyone in this country give a care about how much tax # a foreign country would charge their citizen to discourage them # from purchasing American foreign goods? Even a U.S. postmaster # would encourage very low declarations. Every shipper knows to # do so, unless they're an upstart shipper. This post is my due diligence check.

      This post is the thinnest due diligence check I've ever heard of.

      Don't expect the State Bar Ethics Committee to agree that this

      constitutes due diligence.

      Is it illegal in the U.S. to do this practice?

      Yes. Defrauding a foreign government is a crime.

      Are the customs declarations a U.S. legal form even if the shipping is UPS?

      Every form is a legal form. Even if it says at the top: "This is not

      a legal form."

      What are the chances it will cause him a problem?

      Irrelevant. You will be committing a breach of ethics and probably a

      crime if you advise the client on how to get away with a crime.

      Telling the client what you think or what you found out about the

      chances of getting caught would qualify as advising.

      His PO is requiring money in/out reports per month, which are unaffected by this, and the PO is very unsavvy about computers.

      Irrelevant. You will be committing a breach of ethics and probably a

      crime if you advise the client on how to get away with a crime.

      Telling the client what you think about the likelihood of the PO

      catching on would qualify as advising. Even accepting the client's

      assessment of that risk, without objection, might qualify.

      It does seem to be a common shipping practice to declare a false value. Even Bloomingdale's wrote a falsely inflated price on a certificate for the value of some jewlry that I bought, an entirely domestic transaction.

      There may be some wiggle room in valuation, by using wholesale price

      vs retail price vs manufacturer's cost, vs insurance replacement

      value, etc. You can check that out in the customs laws and

      regulations. But there will be no wiggle room about labeling

      something as a gift when it isn't.

      As for common practices, the Foreign Corrupt Practices Act and the

      Foreign Tort Claims Act are not forgiving about using the term "common

      practice" as a license to violate local laws.

      You should withdraw from representation unless you receive

      satisfactory assurances that no future crimes are planned or will be

      committed. That's the only way to protect yourself. The client is

      responsible for his own risks, and may well decide that common

      practices are a competitive requirement. But you are responsible for

      your own risks.

      If you make it a firm rule that you will always take the high road,

      even when it costs you a client, you will avoid learning how your name

      looks on a federal indictment. I have known some people who relied on

      the unlikelihood of getting caught, including lawyers. Those that

      ended up in legal trouble or ethics committee trouble would agree that

      there was in their past one critical decision point where they had the

      opportunity to determine that their life would be on the straight and

      narrow path. Messing up that opportunity the first time seems to be

      what sends them down a road they are eventually sorry they ever

      traveled. If this is your critical decision point opportunity, make

      the most of it. You have my best wishes.

      McGyver

      #2; Thu, 16 Sep 2004 17:15:00 GMT
    • Thank you both for your replies.

      I'm a "computer guy" for the client, not a lawyer.

      I'll pass on the information about it being illegal,

      and suggest that he not do it because if he had a

      dispute with any employees (who all know his status)

      then he could be screwed.

      #3; Mon, 20 Sep 2004 22:33:00 GMT