Partner Jaimie Nawaday Weighs in on Customs Duties Fraud and Compliance in the Fashion and Retail Industry
May 8, 2019
Partner Jaimie Nawaday was quoted in the WWD article “Legal Matters: How Fashion Can Weather the DOJ’s Focus on Fraud.” The article examines the U.S. Department of Justice’s pursuit of customs duties fraud, recent cases in the fashion and retail industries, and new compliance guidelines introduced in April 2019.
“[Prosecutors] are going to look at what companies are doing in terms of due diligence on their business partners, and quality control on invoices coming in,” said Jaimie. “Or if they’re turning a blind eye because they’re benefiting from importing at low prices.”
In recent years, the DOJ has increasingly used the False Claims Act to prosecute cases against companies that attempt to dodge customs duties, often closely examining companies’ compliance programs to demonstrate negligence — and, if a company’s compliance efforts are deficient, it helps prosecutors make their case. “In a civil case, prosecutors need to show recklessness,” said Jaimie. “You could probably build a civil fraud case if you found a completely defunct compliance program.”
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