Justia White Collar Crime Opinion Summaries

Articles Posted in U.S. Federal Circuit Court of Appeals
Trek was the importer of record for 72 entries of men’s suits in 2004. Mercantile was the consignee. Shadadpuri is president and sole shareholder of Trek, and a 40% shareholder of Mercantile. Trek and Mercantile provided a number of fabric “assists” to manufacturers outside the U. S. An assist refers to “materials, components, parts, and similar items incorporated in the imported merchandise,” 19 U.S.C. 1401a(h)(1)(A)(i). Customs determined that the entry documentation failed to include the cost of the fabric assists in the price paid for the suits which lowered the amount of duty payable by Trek. Shadadpuri had previously failed to include assists in entry declarations when acting on behalf of a corporate importer. The Court of International Trade found Shadadpuri liable for gross negligence in connection with the entry of imported merchandise and imposed penalties under 19 U.S.C. 1592(c)(2). The Federal Circuit reversed the penalty assessment, holding that corporate officers of an “importer of record” are not directly liable for penalties. Shadadpuri is not liable, absent piercing Trek’s corporate veil to establish that Shadadpuri was the actual importer of record, as defined by statute, or establishing that Shadadpuri is liable for fraud or as an aider and abettor. View "United States v. Trek Leather, Inc." on Justia Law