Welcome to Spodek Law Group. Our goal is to give you the reality of federal import/export investigations - not the sanitized version law firm websites present, not the "just pay a fine" fiction, but the actual truth about what happens when federal agencies decide your business is worth investigating. What you read here comes from defending these cases, watching how investigators operate, and understanding the machinery that most business owners only discover too late.
Heres the reality that changes everything about how you should respond: by the time any federal agent contacts you about your import/export business, they have typically been investigating for 18 to 36 months. That "friendly call" to "ask a few questions" comes at the END of their investigation, not the beginning. They already have your bank records. They already have your shipping manifests. They already have your emails. The question they're really asking is whether you'll provide the final piece of evidence they need for indictment.
This is what we call the time asymmetry problem, and understanding it determines whether you spend the next decade in federal prison or resolve this without charges. They had years to prepare. You have days to respond correctly. The clock started long before you knew it was running.
The 18-Month Head Start You Didnt Know They Had
Most import/export business owners imagine investigation works like television - agents show up, ask questions, build a case, then decide whether to prosecute. Thats not how federal investigations actualy work. What happens in reality is almost the exact opposite.
A red-flagged shipment triggers automated referral to Homeland Security Investigations. A suspicious activity report from your bank lands on a FinCEN analysts desk. A denied party screening hit generates notification to the Bureau of Industry and Security. None of this requires your knowledge or consent. None of it generates any notification to you.
From there, federal agents can obtain your complete banking history through grand jury subpoena. They can access your email records through service of process on providers. They can pull your entire shipping history from CBP databases going back years. They can interview your employees, your suppliers, your customers - all without ever contacting you directly.
The multi-agency coordination is the part nobody explains properly. HSI works with CBP. CBP shares data with BIS. BIS coordinates with OFAC. OFAC talks to DOJ. The Disruptive Technology Strike Force - launched February 2023 specificaly to target export violations - brings together Commerce, Justice, FBI, and Homeland Security in coordinated prosecution efforts. Your case file exists in multiple agencies simultaniously before you know theres a case at all.
By the time you get that call or that visit, investigative work is substantialy complete. They know what shipments went where. They know what money moved when. They know what you wrote to whom. The "interview" isnt information gathering. Its confirmation of what theyve already concluded.
Why Your First Conversation Is Actualy Your Last
Heres were people make the mistake that destroys them: they think cooperating without counsel demonstrates innocence. They think explaining the paperwork error will make the investigation go away. They think honesty will be rewarded.
Stop.
Federal agents are trained to elicit specific statements. Every question they ask is designed to lock you into a position. When you "explain" that shipment, your explanation becomes evidence. When you offer context about that transaction, your words appear in a 302 report. When you try to be helpful, you're providing the narrative the prosecutor will use to argue consciousness of guilt.
As Todd Spodek explains to clients facing this situation: the agents dont ask questions they dont already know the answers to. They're testing whether youll lie. They're testing whether youll make admissions. They're gathering the final evidence they need to move from investigation to indictment.
The paradox is brutal but real - the more you try to explain yourself without legal counsel, the more evidence you provide against yourself. Cooperation without strategy isnt cooperation. Its self-incrimination disguised as helpfulness.
And heres the thing that makes it even worse. Anything you say in that interview gets documented in an FBI 302 or HSI report. Those reports are written by the agent, not transcribed from recording. The agent summarizes what you said in their words. If their summary makes you look guilty - even if thats not what you actually meant - thats what goes to the grand jury. Thats what the prosecutor uses. You dont get to explain what you realy meant until trial, by which point the damage is done.
The $100,000 Line Between Fines and Prison
Not every import/export violation becomes a criminal case. The informal threshold that prosecutors use is aproximately $100,000 in duty loss or violation value. Below that number, with no aggravating factors and evidence of inadvertence, cases generaly remain civil enforcement matters. Fines, penalties, compliance agreements.
Above $100,000, everything changes.
Cross that threshold and your case gets serious attention from the U.S. Attorneys Office. Above $250,000, criminal referral is almost automatic. At that point your looking at grand jury proceedings, potential indictment, and exposure measured in years not dollars.
The numbers from BIS enforcement tell the story. In fiscal year 2023, BIS investigations resulted in 67 criminal convictions of individuals and businesses. Thats not theoretical exposure - thats 67 people and companies convicted in federal court for export violations in a single year. The Disruptive Technology Strike Force brought 15 new criminal cases in 2024 alone, bringing the total to 26 cases since inception in February 2023.
If your potential exposure exceeds $100,000, you are in criminal territory and should respond accordingly.
This is not were you want to be explaining things to investigators without counsel present.
What most business owners dont realize is that these thresholds arent published anywhere official. There no federal regulation saying "$100K equals criminal referral." Its pattern based - prosecutors and agents have learned through experience what cases thier supervisors will approve for criminal prosecution. When we see the same patterns repeat across hundreds of cases, we can tell you: your looking at that threshold, and exceeding it changes everything about how you need to respond.
How OFAC Destroys Your Business Before DOJ Charges You
The trap that catches most import/export business owners completly off guard is OFAC - the Office of Foreign Assets Control. OFAC operates on a seperate track from criminal prosecution, and that track can destroy your business before you ever see an indictment.
Heres how it works. OFAC enforces sanctions programs. If your business touched a sanctioned entity - even unknowingly through intermediary transactions - OFAC can take action. And unlike criminal prosecution, OFAC operates under strict liability. Intent doesnt matter. Knowledge doesnt matter. If the transaction happened, your liable.
But the really devastating part? OFAC can freeze your business bank accounts administratively. No criminal charges required. No trial. No conviction. Just a determination that enforcement action is warranted, and suddenly every account your business uses is frozen.
Think about what that means. You cant pay employees. You cant pay vendors. You cant pay your attorney. Your business dies not because you were convicted of anything, but because OFAC exercised administrative authority that runs parallel to whatever criminal investigation DOJ is conducting.
The consequence cascade looks like this: Investigation opens → OFAC identifies potential violation → Administrative freeze of accounts → Business operations halt → Employees leave → Vendors demand payment → Criminal indictment follows → You face trial unable to fund proper defense → Asset forfeiture proceedings begin in parallel → Personal bankruptcy becomes inevitable before conviction.
The civil and criminal tracks running simultaneously is not an accident. Its prosecutorial strategy. The civil side weakens you, the criminal side convicts you.
The current maximum OFAC civil penalty is $377,700 per violation - or twice the value of the underlying transaction, whichever is greater. One shipment to a sanctioned end-user through multiple intermediaries? Thats multiple violations. Ten shipments? Ten violations. The penalties accumulate faster than most business owners can comprehend untill they see the settlement demand.
And OFAC doesnt need to prove you knew the end-user was sanctioned. Strict liability means the transaction itself is the violation. Your due diligence process, your compliance screening, your good faith efforts - all of that matters only for mitigation, not for whether you violated sanctions in the first place.
The Customs Broker Liability You Never Signed Up For
But I didnt know what my broker was doing.
Thats what every importer says when they learn that there customs broker committed fraud. And it doesnt matter.
Consider the case of Frank Seung Noah, a California customs broker. Noah submitted false customs forms to CBP and fake invoices to clients - overcharging the Japanese retail chain Daiso by nearly $3.4 million. After being indicted in 2022, Noah continued defrauding other clients out of another $2 million while out on bond.
Now heres the part that should keep you awake at night: the importers who used Noahs services face potential liability for the fraud he committed on their behalf. Conspiracy liability doesnt require you to know the specifics of the illegal conduct. It requires an agreement - and hiring a customs broker to handle your imports constitutes that agreement.
The "should have known" doctrine makes it worse. If there were red flags - suspiciously low duties, prices that seemed too good, inconsistencies you didnt investigate - prosecutors can argue willful blindness. You deliberately avoided learning what was happening becuase knowing would have required you to act.
En-Wei Eric Chang was a fugitive for 20 years before HSI Baltimore caught up with him for conspiracy to export defense materials to Iran. Twenty years. Federal investigators never stopped looking. They never stop.
Your trusted broker's fraud can become your conspiracy charge. And conspiracy carries the same sentancing exposure as the underlying offense.
The lesson from every one of these cases is the same: trust but verify isnt just a saying. If your customs broker offers you rates that seem too low, duties that seem too good, you need to understand why. You need documentation. You need to verify what theyre actually submitting on your behalf. Becuase when the investigation comes - and it will come - "I trusted my broker" is not a defense the jury will accept.
What Wire Fraud Realy Means for Import/Export Cases
Federal prosecutors have a "catch-all" statute they use when other charges are uncertain: wire fraud. And for import/export cases, wire fraud is devastatingly effective.
Every electronic communication in furtherance of a fraudulent scheme constitutes a seperate wire fraud violation. Every email. Every text message. Every wire transfer. Every online form submission. Each one is a separate count under 18 U.S.C. 1343.
Maximum penalty per count: 20 years in federal prison.
Consider what that means practicaly. A scheme involving 50 emails generates 50 counts of wire fraud. Theoretical maximum exposure: 1,000 years. Even if sentences run concurrent, prosecutors use the count accumulation for leverage. They offer to drop 40 counts if you plead to 10. You take the deal because fighting all 50 counts is impossible.
Wire fraud transforms ordinary business communications into federal criminal charges.
That email you sent explaining the shipment? Wire fraud count. That wire transfer for payment? Wire fraud count. That text to your freight forwarder? Wire fraud count. The machinery of your normal business operations becomes the evidentiary basis for decades of federal prison exposure.
The reason prosecutors love wire fraud is becuase its almost impossible to run a modern business without using wires. Email is wires. ACH transfers are wires. Credit card payments are wires. Every single electronic communication or financial transaction in connection with the alleged scheme becomes a separate felony charge. Prosecutors stack these counts not because they expect consecutive sentences on all of them, but because the sheer volume creates overwhelming pressure to plead guilty.
Think about it from the defendants perspective. Your facing a 200-count indictment. Each count carries 20 years maximum. Your looking at theoretical exposure of 4,000 years. The prosecutor offers to drop 180 counts if you plead to 20. The math makes fighting seem irrational - even if your innocent. Thats the leverage wire fraud creates.
The Permanent Consequences Nobody Mentions
Lets say you resolve the case. Lets say you take a plea, cooperate, accept responsibility, receive a below-guidelines sentance. What happens after?
Heres what nobody tells you.
Federal conviction creates permanant consequences that extend far beyond the prison term. Your export privileges are denied - meaning you can never operate an import/export business again. Your professional licenses are at risk - securities, CPA, law, medicine, all subject to disciplinary action based on federal conviction. Your ability to hold security clearances is gone. Government contracts are barred. Background checks show the conviction forever.
PACER is searchable. Google indexes case documents. Every potential employer, every potential business partner, every licensing board can find your federal case. It doesnt seal. It doesnt expunge. Federal conviction is permanent.
But wait. Theres more.
Immigration consequences for non-citizens can include deportation. Travel restrictions apply - some countries ban entry for convicted felons. Firearms rights are lost permanently. Voting rights depend on state of residence.
And the financial devastation compounds. Asset forfeiture proceedings often run parallel to criminal cases. The government can seize property, accounts, real estate allegedly connected to the offense. Restitution orders require repayment of loss amounts. You emerge from prison with destroyed career prospects and no assets.
This is the consequence cascade that should inform every decision you make from the moment you learn of investigation.
Federal conviction in an import/export case is not the end of punishment - its the beginning of a lifetime of consequences.
Every business opportunity that requires a background check becomes unavailable. Every licensing board that asks about criminal history gets to decide whether you can practice your profession. Every country that asks about felony convictions on visa applications can deny you entry. The sentence the judge imposes is just the formal part. The informal punishment continues for the rest of your life.
Your Window to Act Before They Act
The time asymmetry cuts both ways. Yes, they had 18 months or more to build thier case. But you have a window now - before indictment, before arrest, before your name appears on PACER - to potentially change the trajectory.
What can competent defense do during this window?
Attorney-client privileged internal assessment - identifying what they likely know and what you can explain. Proactive intervention with prosecutors - demonstrating cooperation value before charging decisions are made. Identification of safe harbors and exceptions - the regulations are complex, and defenses exist that investigators may not have considered. Development of intent defense - proving lack of willfulness can be the difference between civil penalties and prison.
At Spodek Law Group, we have seen cases that looked like certain prosecution resolve without charges. We have seen cases that looked like mandatory minimum exposure plead to misdemeanors. We have seen asset forfeiture proceedings reversed. But these outcomes required intervention at the right time with the right strategy.
The window closes when indictment issues. After that, your leverage evaporates. Cooperation credit diminishes. Plea offers get worse. And the government machinery moves toward trial with the same methodical patience it demonstrated during those 18 months of investigation you didnt know was happening.
They built their case slowly and carefully. Your response cannot be slow. It must be immediate, strategic, and guided by attorneys who understand how federal prosecutors think and how these investigations actually unfold.
Taking Action Now
If your import/export business is under investigation - or if you suspect it might be - understand that the calculus has already changed. The question isnt whether this is serious. It is. The question is what you do with the narrow window you have before decisions are made that cannot be unmade.
The federal conviction rate exceeds 90% because prosecutors only bring cases they're confident they can win. That means the cases they bring have already been built carefully. The evidence has already been gathered. The timeline has already been established. Your job now is not to convince them you're innocent - it's to change their calculus about whether prosecution is worth the resources.
That requires understanding how they think. It requires knowing what evidence they likely have. It requires strategic intervention rather than panicked explanation. It requires experience with these specific agencies, these specific statutes, these specific prosecutorial patterns.
Call Spodek Law Group at 212-300-5196. Every day that passes is a day closer to charging decisions being finalized. The investigation had a head start of months or years. Your response needs to start now.
The window is narrow. The stakes are permanant. And the machinery of federal prosecution moves forward whether your ready or not. What matters now is what you do next.
