BIS Settlement Reveals $5.4M Fine on Electronics Store for EEI, Record-Keeping Violations
A New York City-based electronics store was fined $5.4 million by CBP and ordered to forfeit more than $460,000 after it allegedly gave false export information to a freight forwarder and breached record-keeping rules, the Bureau of Industry and Security said last week.
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The store, M&M Wireless, and its three owners also must complete an export compliance training course within one year and will be subject to a three-year BIS probationary period, according to a settlement the company reached with BIS and released Nov. 15. If M&M Wireless commits another export control violation during that time, BIS may suspend its export privileges.
BIS said storeowners Moheed Latif, Hamza Latif and Abdu Latif Chaudhry committed 94 violations of the Export Administration Regulations when they understated the amount of items in at least four shipments of consumer electronics destined to Dubai and failed to keep export records for the required five years after other sales.
M&M Wireless committed four of those violations when it caused a U.S. freight forwarder to prepare and submit false electronic export information in the Automated Export System on their behalf, BIS said. In one instance in November 2020, M&M Wireless declared that a shipment contained 134 items worth about $28,000. After detaining the export, BIS discovered that there were actually 600 items in the shipment.
BIS said it detained and inspected at least three other exports that didn’t match up with the information declared in the EEI, including one in December 2020 that was declared as having 232 items worth about $35,000 when there were actually 474 items.
In another instance in March 2021, M&M Wireless' export declaration listed 146 items valued at about $27,000, but there were actually 386 items, BIS said, and a CBP appraisal found that the shipment was actually worth just over $274,000. Another CBP appraisal of a November 2020 export found there was more than $462,000 worth of consumer electronics in the shipment, but the EEI listed the value at $65,700, BIS said.
M&M Wireless was liable because it was the exporter and the U.S. Principal Party in Interest, BIS said, so it was responsible for giving the freight forwarder accurate information. “M&M was not absolved of its responsibility to ensure the accuracy of such information because of its use of a freight forwarder to effectuate its exports,” BIS said.
M&M Wireless also violated BIS export record-keeping requirements 90 times because it didn’t keep the bills of lading, financial records and other “correspondence” related to 90 sales, the agency said. Companies must keep those records for at least five years after the export, but BIS said a lawyer for the store said “no such records existed” after the agency requested those documents through a subpoena.
M&M Wireless and its owners couldn’t be reached for comment. A lawyer representing the business didn’t immediately respond to a request for comment.