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Samsung C&T America Hit with $1M Customs Fraud Settlement
NEW YORK, NY – Global trading giant Samsung C&T America, Inc. (“SCTA”) is shelling out $1 million to the U.S. government after admitting to a scheme to dodge customs duties on imported footwear. Federal prosecutors revealed the company deliberately misclassified goods to reduce the tariff rates, effectively shortchanging American taxpayers. The settlement, approved by U.S. District Judge Paul G. Gardephe, brings a close to a civil lawsuit alleging violations of the False Claims Act.
The feds say that between May 2016 and December 2018, SCTA, a U.S. subsidiary of the Korean conglomerate Samsung C&T Corporation, engaged in a calculated effort to minimize its financial obligations. The company, which handles financing, transportation, warehousing, and distribution for imported goods, allegedly provided inaccurate information to customs brokers regarding the construction and materials of the footwear. Critically, SCTA failed to verify the accuracy of this information before submitting it to authorities, according to the complaint filed in Manhattan federal court.
“SCTA improperly avoided paying the full customs duties owed to the United States by misclassifying certain footwear that it imported and thereby reducing the duty rate applied,” declared U.S. Attorney Damian Williams. “This Office is committed to combatting customs fraud by holding companies accountable when they misclassify goods and evade paying their legally required duties.” The investigation, a collaborative effort between multiple agencies, uncovered a pattern of deceptive practices designed to gain an unfair economic advantage.
AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, emphasized the seriousness of the offense. “Misclassification and avoiding the payment of lawful duties on imported goods is a serious matter,” she stated. “This practice allows entities to import goods without paying the U.S. Government the lawful amount of duties owed, creating an unfair advantage over law-abiding American businesses.” The $1 million settlement isn’t just about the money; it’s about sending a message that such behavior won’t be tolerated.
Federal investigators say SCTA imported footwear from manufacturers in China and Vietnam, and then systematically mislabeled the goods. Francis J. Russo, Director of CBP Field Operations New York, lauded the “total team effort” of CBP import specialists, regulatory auditors, Homeland Security Investigations (“HSI”) agents, and the U.S. Attorney’s Office. Ivan J. Arvelo, Special Agent in Charge of HSI’s New York Field Office, added that SCTA submitted false information for two and a half years, and that his agency, along with its partners, will “hold accountable organizations that engage in improper trade practices and deny our government of vital revenues.”
As part of the settlement, SCTA admitted to the misclassification and underpayment of customs duties. While the company has agreed to pay the $1 million penalty, the damage to its reputation remains to be seen. The case serves as a stark warning to other importers: cut corners on customs compliance at your own peril. The U.S. government is watching, and they’re ready to collect.
Key Facts
- State: New York
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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