Trade fraud is a growing problem in California and throughout the United States, according to new study published in the Oregon Review of International Law. According to the authors of the study, the issue costs the U.S. millions in lost tax dollars every year and puts the public at risk. However, trade fraud crimes are difficult to detect and prosecute.
For the study, the authors analyzed 47 criminal and civil trade fraud cases that occurred between 2000 and 2016. The defendants in the cases ranged from executives at large corporations to the owners of small neighborhood businesses. The study determined that criminal charges may not be the best way to battle this “new frontier” of white-collar crime. Instead, it recommends developing teams from various federal agencies that will pursue cases under the False Claims Act of 1863, which was designed to bring down fraudulent suppliers during the Civil War.
According to the study, the False Claims Act is attractive because it levies heavy fines, allows treble damages and has a heightened mens rea requirement, which is the legal term for the intent to commit a crime. As a result, the authors believe the law will effectively deter fraudulent importers. In addition to creating interagency enforcement teams, the study recommends that the government hire and train U.S. Attorneys to concentrate on fighting trade fraud, create a centralized repository of international shipping records and make information on trade fraud cases easily accessible to the general public.
Individuals charged with trade fraud or other white collar crimes may want to retain a criminal defense attorney as quickly as possible. An attorney could ensure a defendant understands the charges and work to develop an effective defense strategy based on the details of the case.
Source: The Crime Report, “Trade Fraud: The ‘Wild New Frontier of White Collar Crime’“, July 13, 2018