CIT Rules Revocation of Customs Broker's License Must be Reviewed Again
The Court of International Trade remanded Sherri N. Boynton v. U.S. to the Secretary of the Department of Homeland Security to review and determine an appropriate penalty based on the Court's findings as to the charges against Boynton that it had determined to be violations of Customs rules and regulations.
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Plaintiff Sherri N. Kaplan aka Boynton received her Customs broker's license in 1987 and worked as a qualified broker for Southwest Customs Service until she resigned in July of 1998. On July 23, 1998, she applied for and received a new Customs broker permit to conduct business as Sherri N. Boynton.
During the next three years, problems arose concerning Boynton's action as a Customs broker, and she was advised in writing and in person, about proper procedures. Eventually, the port director of Los Angeles/Long Beach requested that proceedings be initiated to revoke Boynton's license. After revocation proceedings and a formal hearing, Boynton's license was revoked by the Secretary on January 23, 2006 based on Boynton's total record as a customs broker, rather than on any particular charge.
The Customs Regulations allow for revocation of a customs broker's license, if the broker has violated any provision of any law enforced by Customs or the rules or regulations issued thereunder. However, Customs' policy (as stated in Customs Directive 099 3530-007) has generally been to issue progressive penalties and to reserve revocation only in the case of egregious violations. Examples of egregious violations in the Directive include (1) continued employment of a felon after Customs has denied the broker permission for such employment, (2) the continued filing of entries by a broker after the broker is notified that his or her permit has been revoked, and (3) the intentional misuse of clients' funds.
The CIT reviewed the nine charges against Boynton and determined that there was not sufficient evidence to support three specifications in Charge III and all of Charge VII. The remaining charges and specifications, however, were found to be supported by sufficient evidence to be considered violations.
Examples of the charges (or specifications), include: (1) Boynton did not have a properly executed power of attorney for one of her employees, but nonetheless had him conduct Customs business on her behalf from September 4, 1998 until July 22, 1999; (2) Boynton failed to maintain and produce for inspection required records; (3) Boynton failed to meet the standard of diligence required of a customs broker with correspondence and payments; (4) Boynton failed to keep Customs informed of her actual business address; (5) Boynton used in unauthorized version of her name on some entry documents; (6) Boynton filed a false power of attorney for a specific company; (7) Boynton filed 322 late entries between September 1998 and March 2000; and (8) Boynton also failed to provide proper general supervision for the actions of her employees and the business conducted in her name.
Based on the court's review and the reduction in the number and substance of the charges, the CIT found that the total record on which the Secretary had relied was no longer the same and the case was remanded to the Secretary to consider the appropriate penalty.
Customs Directive Number 099 3530-007, available at http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/3530-007.ctt/3530_007.doc
CIT Slip Op. 07-146 (dated 10/02/07) available at http://www.cit.uscourts.gov/slip_op/Slip_op07/07-146.pdf