18 Sep 23

Falsifying Shipping Records to Evade Sanctions

| by

Last Updated on: 19th September 2023, 05:12 am

Falsifying Shipping Records to Evade Sanctions

International trade is heavily regulated, with strict rules about where goods and materials can be shipped. To enforce trade sanctions and embargoes, accurate shipping records are essential. Falsifying these records to hide the origin or destination of cargo is a serious federal crime.

How Shipping Record Fraud Helps Evade Sanctions

Here’s how fudging shipping records facilitates evading sanctions:

  • Changing the stated origin or destination circumvents banned trade routes.
  • Mislabeling goods as exempt items avoids restrictions.
  • Forging documents gets cargo past customs inspectors.
  • Double bookkeeping hides illicit transactions from regulators.
  • Fake records disguise the identities of sanctioned individuals or entities.

In short, fraudulent shipping records are a key tool for bypassing economic and trade sanctions. This impacts national security and undermines U.S. foreign policy goals.

Federal Laws Against Shipping Record Fraud

Numerous federal statutes outlaw falsifying shipping records and related statements:

These laws impose severe penalties for shipping record fraud to circumvent sanctions, trade embargoes, and regulations.

Penalties for Shipping Record Fraud

The potential consequences for falsifying shipping records include:

  • Up to 5 years in federal prison per violation.
  • Massive fines up to $250,000 for individuals, $1 million for companies.
  • Forfeiture of goods involved in the offenses.
  • Probation, home confinement, community service.
  • Revoked import/export licenses.
  • Ban on future work in shipping or customs brokerage.

Judges factor the scope and intent of the violations when imposing sentences. Large-scale schemes to intentionally evade sanctions warrant the harshest penalties.

How Prosecutors Prove Shipping Record Fraud

To convict on shipping record fraud charges, prosecutors must prove:

  • The defendant made a false statement or submitted falsified records.
  • The deception was intentional, not an accident or mistake.
  • The falsification was material, meaning it could impact decisions.
  • The defendant knew the records were material to regulators.

Prosecutors use documents, witness testimony, financial records, and other evidence to prove these elements beyond a reasonable doubt.

Defenses Against Shipping Record Fraud Charges

Possible defenses against shipping fraud charges include:

  • Lack of intent: Argue you did not knowingly make false statements.
  • Good faith: Contend you had an honest, reasonable belief in the records’ accuracy.
  • Not material: Assert the alleged deception did not impact decisions.
  • Duress: Claim you were coerced into falsifying records.

An experienced criminal defense lawyer can analyze the evidence and develop defenses to undermine the prosecution’s case.

Investigations and Charges for Shipping Fraud

Multiple federal agencies investigate shipping record fraud, including:

  • U.S. Customs and Border Protection
  • Department of Commerce – Bureau of Industry and Security
  • Federal Bureau of Investigation
  • Department of Homeland Security
  • Internal Revenue Service

Charges often involve conspiracy, false statements, smuggling, and sanctions evasion. These complex cases require an attorney experienced in federal fraud crimes and trade laws.

Avoiding Allegations of Shipping Record Fraud

To steer clear of shipping fraud accusations:

  • Rigorously validate all documents for accuracy.
  • Train employees on recordkeeping protocols.
  • Consult counsel when unsure if records comply with regulations.
  • Conduct internal audits to identify any discrepancies.
  • Fully cooperate if investigators inquire about records.

Prevention is the best medicine. With sound compliance practices, companies can avoid the severe consequences of shipping record fraud allegations.

The Bottom Line

Falsifying shipping records enables evading sanctions but carries steep penalties. An experienced attorney can help companies implement compliance best practices. If charges do arise, skilled legal counsel is critical to mitigate consequences.