Commercial Fraud

Commercial fraud investigations focus on commercial importations involving false statements and deceptive business practices. Fraud investigations are important components of an overall trade strategy whereby ICE concentrates on enforcing revenue protection and, increasingly, non-revenue (e.g., trademark, quota, health) protection laws and regulations. Successful cases produce significant seizures, civil penalties, and/or criminal prosecutions.

The ICE Financial and Trade Investigations Division oversees several programs aimed at stopping predatory and unfair trade practices that threaten our economic stability, restrict the competitiveness of U.S. industry in world markets, and place the public health and safety of the American people at risk. These programs include NAFTA/trade agreements, in-bond diversion, textile fraud, anti-dumping/countervailing duties, forced labor (child/prison), tobacco, public health/safety and environmental crimes and endangered species trafficking. Combating commercial fraud is the basis of important links to the international trade community, and more importantly, to the war on terrorism. Fraud investigations have identified systems shortfalls, which could facilitate the illegal importation of weapons of mass destruction and chemical/biological agents. They also have shown how fraudulent importations may generate illegal revenues for organizations engaged in international organized crime.

Counterfeit merchandise not only represents a billion dollar industry at the expense of American companies, it also represents a public safety hazard when the merchandise involves medicines, auto and aircraft parts, as well as inferior hardware that could potentially be used in the construction of buildings, bridges and other major structures. ICE, along with the FBI, run the National Intellectual Property Rights Coordination Center (IPR Coordination Center), based in Washington, which serves as a collection point for IPR intelligence, and a national point of contact for IPR-related matters for all government agencies.

In-Bond Diversion:

In-bond diversion occurs when an importer brings merchandise through the U.S., allegedly intended only for export. Once in the U.S., the importer doesn’t move the merchandise out of the country thereby illegally circumventing duty payments, quota and visa restrictions and sometimes introducing restricted or prohibited merchandise into this country.

In-bond diversion is probably the biggest single commercial fraud threat. To address this problem, the Commercial Fraud and IPR Unit has partnered with U.S. Customs and Border Protection (CBP) to target high-risk commodities such as textiles, tobacco and liquor for intensive inspection and surveillance. This initiative has led to an increase in seizures, penalties and arrests for fraud.