RESS RELEASE
Ford Motor Company will pay the United States $365 million to resolve allegations that it violated the Tariff Act of 1930 by misclassifying and understating the value of hundreds of thousands of its Transit Connect vehicles.
The settlement ends allegations that Ford devised a scheme to avoid higher duties by misclassifying cargo vans. Specifically, the government alleged that from April 2009 to March 2013, Ford imported Transit Connect cargo vans from Turkey into the United States and presented them to U.S. Customs and Border Protection (CBP) with sham rear seats and other temporary features to make the vans appear to be passenger vehicles. These temporary rear seats were never intended to be, and never were, used to carry passengers. Rather, the government alleged, Ford included these seats and features to avoid paying the 25% duty rate applicable to cargo vehicles. By classifying the vans as vehicles for the transport of passengers, Ford instead paid a duty rate of just 2.5%. Ford submitted entry papers to CBP declaring these vehicles as classifiable under tariff heading 8703 as “Motor cars and other motor vehicles principally designed for the transport of persons.” After customs clearance, each of these Transit Connect vehicles was immediately stripped of its rear seats and returned to its original identity as a two-seat cargo van.
The settlement also resolves allegations that, from April 2009 through August 2013, Ford avoided paying import duties by under-declaring to CBP the value of certain Transit Connect vehicles.
“This settlement, which is one of the largest customs penalty settlements in recent history, demonstrates that U.S. Customs and Border Protection will pursue even the largest companies to ensure that all importers follow the rules; our intent is to enforce the customs laws fairly, which means that non-compliance is not an option for anyone,” said Senior Official Performing Duties of the Commissioner Troy A. Miller of CBP. “The partnership between CBP and the Justice Department provides a critical safeguard to protect the revenue of the United States.”
Jeffrey Newman is a whistleblower lawyer whose firm represents whistleblowers in healthcare fraud under the False Claims Act (FCA) also whistleblower claims brought under the SEC whistleblower program for violations of securities regulations including insider trading cases. He also handles cases involving evasion of US sanctions against China, Iran and Russia and other sanctioned entities and he can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
