What to Do If Your Employer Has Two Sets of Invoices
If you work in accounts payable, purchasing, customs compliance, or logistics at a company that imports goods, and you have seen invoices that don't match — a real one in the files and a different one submitted to customs — you may be in possession of exactly what the government needs to bring a False Claims Act case. This post explains the different forms this fraud takes, why employees in your position often see it when no one else does, and what to do — and critically, what not to do — if you are facing this situation.
The Basic Mechanics: Why Invoices Are the Heart of the Fraud
Under 19 U.S.C. § 1401a(b)(1), the dutiable value of imported merchandise is the transaction value — the price actually paid or payable for the goods when they are sold for export to the United States. The commercial invoice submitted to CBP with Form 7501 is the primary document establishing that value. It is the document on which customs duties are calculated. It is also, in many undervaluation schemes, the document that is falsified.
The falsification can take several forms. At one end of the spectrum, an importer simply asks its foreign supplier to prepare a second, lower-value invoice specifically for CBP submission, while the real invoice — the one that reflects what the importer actually paid — stays in the company's internal files. At the other end, the importer receives a single accurate invoice from its supplier and alters it before handing it to the customs broker. In the middle sits a range of techniques — invoice-splitting, phantom charges, sample-goods reclassification, and others — that accomplish the same goal through different mechanisms.
What all of these schemes share is that the government ends up with a document that does not reflect what the importer actually paid. CBP calculates duties on a false number, collects less than it is owed, and the importer pockets the difference. At pre-2018 duty rates, the savings were modest. At post-2018 Section 301 rates on Chinese goods — which added 7.5 to 25 percent on top of existing rates — and with antidumping and countervailing duties that can exceed 100 percent in some product categories, the financial incentive to falsify the invoice became enormous, and the schemes became more aggressive.
The commercial invoice submitted to CBP is the primary document establishing the dutiable value of imported goods. It is also, in many undervaluation schemes, the document that is falsified. An employee who has seen both versions is the most important witness the government can have.
The Three Major Patterns
Pattern 1: The Classic Dual-Invoice Scheme (Supplier-Provided)
How it works: The foreign supplier, at the importer's direction, prepares two separate invoices for each shipment. The first invoice — sometimes called the "pay by" invoice, the "real" invoice, or the commercial invoice — reflects the price the importer actually agreed to pay. The second invoice, at a substantially lower amount, is prepared for submission to CBP. The importer pays the supplier the real amount. It gives the broker only the false invoice. We have found in our practice that many foreign suppliers have been willing to facilitate this kind of scheme.
The Stargate Apparel case: This is the textbook example. Beginning in 2007, Stargate Apparel and Rivstar Apparel, New York-based children's clothing companies, instructed their primary Chinese manufacturer to provide two invoices for every shipment. The first — the internal "pay by" invoice — reflected what Stargate actually paid. The second, at a much lower amount, was handed to the customs broker. The broker, seeing only the second invoice, submitted it to CBP in good faith. The company's CEO was criminally charged, pled guilty, and was sentenced to six months in prison. The civil FCA settlement totaled $6 million, brought initially by the company's CFO as a whistleblower.
A later variation: When Stargate moved away from the straightforward two-invoice approach, it evolved to a second scheme: the supplier would provide a single commercial invoice for the goods, plus a separate invoice labeled "sample goods," "testing charges," "accessory charges," or "commissions." Together, the two invoices reflected the actual price paid. But Stargate submitted only the commercial invoice to CBP, treating the remainder as non-dutiable. The goods were not, in fact, samples or test items. The "second invoice" was simply a mechanism to move value outside the dutiable amount while paying the supplier in full.
Who sees it: Accounts payable staff who process both invoices. The CFO or controller who sees both the "pay by" wire transfer and the much lower invoice submitted to the broker. Purchasing staff who manage the supplier relationship and know the true price. Anyone who has access to both the internal payment records and the customs entry documentation.
Pattern 2: The Altered-Invoice Scheme (Company-Modified)
How it works: Unlike the classic dual-invoice scheme, in which the supplier prepares a false invoice at the importer's direction, in the altered-invoice scheme the supplier sends a single, accurate invoice reflecting the real price. The importer's employees then alter the invoice — changing the unit prices, the total, or both — before passing it to the customs broker for CBP submission. The broker sees only the altered document and has no way to know it has been modified. The original unaltered invoice remains somewhere in the importer's records, creating a paper trail that investigators can find. We have pursued several fact patterns precisely like this, including the Precision Cable Assemblies case.
The forensic footprint: The altered-invoice scheme is, in some respects, the easiest to prove. The original supplier invoice — the unaltered version — still exists in the importer's email servers, accounting systems, or supplier portals. Metadata from the modified spreadsheet files can confirm when they were changed and by whom. The discrepancy between the wire transfer amounts (which match the real prices) and the declared customs values (which match the altered invoices) is arithmetically obvious once both sets of records are assembled. Investigators who know what to look for can reconstruct the scheme almost entirely from the importer's own records.
Who sees it: The person who actually makes the alterations is the most direct witness, but rarely the only one. Accounts payable staff who process the supplier payments see wire transfers that don't match the invoices on file for customs purposes. Logistics coordinators who receive the original supplier invoices and then see something different submitted to the broker may notice the discrepancy. IT staff with access to email archives or file modification logs may have the metadata evidence without fully understanding what they've seen.
Pattern 3: Invoice-Splitting and Shipment-Splitting
How it works: Rather than falsifying the price on a single invoice, invoice-splitting and shipment-splitting schemes manipulate the structure of the transaction itself. In invoice-splitting, a single order is documented as multiple smaller invoices — each individually below a duty threshold or below an administrative de minimis level — to reduce the apparent per-shipment value. In shipment-splitting, a single large shipment is physically divided into multiple smaller shipments, each entered separately with CBP, to achieve the same effect. The goal is identical: to reduce the declared value at each entry to a level that minimizes or eliminates the duty obligation.
De minimis splitting — and why it still matters after the exemption's demise: For years, the most common variant exploited the Section 321 de minimis exemption, which allowed goods valued at $800 or less per person per day to enter the U.S. duty-free. Importers split what was effectively a single commercial shipment into individual entries each valued below $800 — often routed through a third-party fulfillment operation to generate individual-consumer-style entries. That landscape has changed: the exemption was suspended for Chinese-origin goods in 2025, the suspension was extended globally by an interim final rule in June 2026, and Congress has repealed Section 321's de minimis privilege outright effective July 1, 2027. But the change in the rule does not erase the exposure. Every false de minimis entry filed while the exemption existed remains actionable — the False Claims Act reaches back six years, and in some circumstances ten. Employees who watched a de minimis-splitting operation run in 2023 or 2024 are holding claims that are very much alive today.
Invoice-splitting within a single shipment: A variation on the same theme occurs when goods from a single purchase order are documented across multiple invoices, not to get below the de minimis threshold, but to avoid triggering antidumping or countervailing duty rate application at higher values, or to disaggregate a shipment in a way that obscures that the goods fall within a targeted HTS category. The mechanics are different from altered-invoice fraud, but the underlying legal violation is the same: the entry documents do not accurately reflect the transaction.
Who sees it: Purchasing and logistics staff who know the original order was a single transaction and understand why it is being documented and shipped in fragmented form. Warehouse and receiving staff who see consolidated pallets arriving that are internally documented as multiple separate shipments. Customs compliance staff who flag the entries as inconsistent with what they know about the purchasing patterns.
The Position You Are In
Employees who discover two sets of invoices occupy a distinctive and legally significant position. They typically have direct, documentary evidence of the fraud — not a suspicion, not an inference, but an actual comparison between two documents that should say the same thing and don't. That is exactly what makes them the most effective relators in this category of False Claims Act case.
It also means they are carrying significant personal risk. In every invoice fraud case, there are employees who knew and said nothing, employees who knew and participated, and employees who knew and are considering what to do. The legal exposure for those in the middle category — who knowingly facilitated the submission of false invoices to CBP, even without being the architects of the scheme — is real. So is the exposure for those who are asked to perform the alteration, create the false documents, or hand the falsified materials to the broker.
The FCA's anti-retaliation provision, 31 U.S.C. § 3730(h), protects employees who take action 'in furtherance of' an FCA claim — which includes investigating the fraud, gathering information, and consulting with an attorney. It does not protect employees who participate in the fraud itself. Getting the timing right matters more than most employees in this situation understand.
The customs broker's position: In both the Stargate and Precision Cable cases, the customs broker was identified as an "unknowing" participant — it received the false invoices and submitted them to CBP in good faith. A broker in that position is not legally exposed under the FCA. A broker who knew or had reason to know the invoices were falsified — because the prices were inconsistent with what the broker knew about the market, because the importer explicitly told the broker the real prices, or because the broker had been flagging concerns that were ignored — is in a materially different position. Licensed customs brokers who have knowledge that their importer-client is submitting false customs values are potential relators, not just potential witnesses.
What the Evidence Looks Like, and Why It Is So Durable
Invoice fraud cases are among the most evidence-rich in the customs FCA space. Unlike origin fraud, which may require complex supply chain analysis, or valuation fraud based on related-party pricing, which may require reconciling transfer pricing documentation across multiple systems, invoice fraud tends to be self-proving once the right documents are identified. The false statement is in a specific, identifiable document. The true version is usually preserved somewhere. The gap between them is clear.
The evidence that typically exists in these cases includes:
Original supplier invoices in email systems. Chinese suppliers typically send invoices by email. In altered-invoice schemes like Precision Cable, the original unaltered spreadsheet arrives in an email inbox and is preserved in the email server even after the modified version is created. The original is accessible to employees with email access, to IT staff, and — through legal process — to government investigators. Email metadata provides a timestamp for the original and a separate timestamp for the modified version, establishing when and by whom the alteration was made.
Accounting system records that reflect actual payment amounts. The company pays its supplier the real amount, and that payment is recorded in the accounts payable system. The entry summary value declared to CBP is separately recorded in the customs file. The two records will not match in an undervaluation scheme. Accounts payable staff and controllers who work in both systems are in a position to see the discrepancy directly.
Wire transfer records. Bank records showing the amount actually wired to the foreign supplier are among the most durable evidence in customs fraud cases. They are maintained by the bank independently of the importer, cannot be altered retroactively, and directly contradict a false customs value. In many cases, the wire transfer amount alone is sufficient to establish what the importer actually paid.
Supplier portals and order management systems. Many importers use supplier-facing order management systems that record purchase orders and confirmations at the real price. These systems are often independent of the accounting records that eventually get used to prepare the customs entry, and they preserve the original pricing data even if the invoice itself has been altered.
Internal communications. The instruction to create a false invoice, to alter a spreadsheet, or to split a shipment does not typically happen in silence. It is communicated — by email, by messaging application, in a meeting. Employees who received or sent those communications, or who were copied on correspondence in which the scheme was discussed, have documentary evidence of both the fraud and the scienter that makes it actionable under the FCA.
File metadata. In schemes like Precision Cable, where accurate supplier spreadsheets were altered before submission to the broker, the modified file retains metadata — creation date, modification date, last edited by — that documents the alteration. Forensic analysis of the modified files can establish precisely when the changes were made and, in many cases, on whose computer. Employees who made the alterations or who have copies of both the original and the modified file are holding some of the most direct evidence in the case.
Why the evidence does not disappear: A common concern among employees who discover invoice fraud is that by the time they consult a lawyer, the evidence will be gone — emails deleted, files overwritten, records purged. In practice, invoice fraud evidence is remarkably durable. Original supplier invoices are preserved in email servers that the importer does not control. Bank wire records are maintained by financial institutions independently. Supplier portals and order systems store transaction records on the supplier's infrastructure. And once the government opens an investigation and issues document preservation notices, destruction of records becomes obstruction — which can turn a civil FCA case into a criminal one. Do not delete anything. Do not ask anyone else to delete anything. And do not wait for the evidence to deteriorate before consulting counsel.
The Scienter Question: "I Was Just Following Orders"
Employees who participated in the mechanics of invoice fraud — who made the spreadsheet alterations, who created the false invoices, who handed the modified documents to the broker — sometimes fear that their own involvement disqualifies them as relators or exposes them to personal liability. This is a real concern that requires careful legal analysis, but it does not automatically prevent someone from being a relator.
The FCA's qui tam provisions do not bar participation by people with some degree of involvement in the scheme, particularly where the involvement was at the direction of superiors and the employee took steps to bring the fraud to light rather than conceal it further. The degree of involvement, the circumstances in which it occurred, and the employee's subsequent actions all affect the analysis. DOJ has discretion in this area, and it exercises that discretion differently depending on whether the employee was the architect of the fraud or a lower-level participant following instructions under pressure.
What the law does not protect is an employee who knowingly participated in the fraud and then files a qui tam solely to convert that participation into a financial windfall. The FCA permits the court, at the government's request, to reduce or eliminate a relator's share if the action is based primarily on conduct in which the relator planned and initiated the fraud. Employees who were substantially responsible for designing or directing the scheme face the greatest risk of a reduced share, and should have a candid conversation with FCA counsel about that exposure before filing.
Employees with limited or coerced involvement, who have knowledge of the scheme but did not originate it, and who consult a lawyer before taking any further action, are in a substantially different position — and are often the most effective relators the government works with, because they have direct, intimate knowledge of how the fraud operated from the inside.
What to Do — and What Not to Do
If you have discovered that your employer maintains two sets of invoices — or that invoices are being altered, split, or supplemented with phantom charges to reduce the declared customs value — the following guidance applies regardless of which specific variation you have encountered.
Do not confront your employer. Raising the issue internally before consulting with an FCA attorney is the single most common mistake employees in this situation make. The likely response is not compliance — it is document destruction, retaliatory termination, and an internal narrative that frames you as the problem. Internal reporting does not protect your relator position. It does not start the FCA limitations period. It alerts the company to the existence of a potential whistleblower, which is information they will use against you.
Do not delete or destroy anything. You have no obligation to preserve evidence at this stage, but actively destroying documents — even documents that implicate you — creates independent legal exposure. Leave everything where it is. If you have copies of relevant documents in your personal email or on personal devices from work conducted at the office, do not delete them. If you have concerns about what your employer might do with its own records, that concern should be communicated to your lawyer, who can address it through the litigation process.
Do not make additional copies using company systems. The temptation to forward incriminating emails to a personal account or to photograph documents on your phone before you leave is understandable. Resist it. Depending on your employment agreement and applicable law, taking company documents without authorization can create legal exposure that complicates your case and gives your employer a basis to reframe the narrative. Discuss with your lawyer what documents you legitimately have access to and what steps are appropriate before taking any action.
Document what you know from memory. Before consulting a lawyer, write down — on personal paper or a personal device, not company systems — what you observed, when you observed it, who else was present, and where the relevant documents are located. Specific entry numbers, invoice numbers, date ranges, and the names of the people who directed or were aware of the scheme are all useful. The quality of a qui tam complaint is significantly improved by a relator who can provide precise details rather than general impressions.
Consult FCA counsel before doing anything else. The first-to-file rule, the public disclosure bar, the timing of any parallel CBP prior disclosure by your employer, and the implications of your own involvement in the scheme are all questions that require legal analysis before you act. An attorney who handles False Claims Act cases can evaluate the strength of your case, advise you on how to proceed, and file under seal before anyone else does. That filing date is the one that matters.
A specific warning about "cooling off" periods: Some employees who discover invoice fraud decide to wait — to see if the company stops on its own, to wait until they have left the company, or to wait until they have assembled what they believe is a complete picture of the scheme. Waiting creates risk on every dimension. Another employee with the same knowledge may file first. The company may make a prior disclosure to CBP that affects the qui tam. The scheme may become public through a government investigation or press coverage that triggers the public disclosure bar. And the FCA's statute of limitations — six years, extendable to as much as ten in some circumstances — does not wait for you to feel ready. The optimal time to consult FCA counsel is as soon as you understand what you are looking at.
What Happens Next
In a strong invoice fraud case, the litigation path is often shorter than in other categories of customs FCA cases. The reason is simple: the evidence structure in an invoice fraud case — a real invoice on one side, a false invoice on the other, and accounting records that confirm which one reflects what the importer actually paid — is relatively easy for DOJ to evaluate quickly. There are no contested HTS classification questions, no origin-determination issues requiring supply chain analysis, and no complex valuation methodology disputes. The question is straightforward: did the company submit a document to CBP that it knew was false? The answer is either demonstrable or it isn't.
In Precision Cable, DOJ intervened and settled within one year, which is rapid by FCA standards. In Stargate, DOJ filed its own civil complaint before the underlying criminal case against the CEO had concluded, pursuing both tracks simultaneously. Both outcomes reflect a government that, in clear invoice fraud cases with documentary evidence in hand, is willing to move.
The whistleblower relator share in these cases has typically fallen in the 12 to 20 percent range when the government intervenes and the relator has provided the core evidentiary foundation. In the Precision Cable settlement, Travis Grob received $1.26 million out of a settlement of just over $10 million — approximately 12.5 percent. In Stargate, the CFO-relator received $1.2 million out of a $6 million total. These are meaningful amounts. They are also, in cases where the underlying fraud ran for multiple years at scale, often a fraction of what could be recovered if the case were brought earlier in the scheme's lifecycle.
If you are a customs broker who received invoices you now believe were altered: Customs brokers are in a distinctive position in altered-invoice cases. If you submitted entries based on invoices your client provided, and you had no reason to know those invoices were false, your FCA exposure is minimal — you were a conduit, not a participant. But if you noticed pricing that was inconsistent with your knowledge of the market, if the client gave you instructions that raised questions you declined to pursue, or if the client explicitly told you not to worry about discrepancies between the wire transfer amounts and the invoice values, your position is more complicated. Licensed brokers with knowledge of ongoing invoice fraud are potential relators with standing to bring a qui tam. They are also, if they continued filing entries without raising the issue, potentially on the wrong side of the FCA's deliberate-ignorance standard. Consulting FCA counsel is the right step regardless of which position you find yourself in.
Greene LLP
Greene LLP has handled False Claims Act cases involving customs fraud since 2011. Our attorneys understand both the FCA litigation framework and the mechanics of customs compliance at a level that allows us to evaluate an invoice fraud case from the ground up — assessing the quality of the documentary evidence, the likely scope of damages, the relator's own position, and the timing considerations that determine whether a qui tam is worth filing. We handle these matters on a contingency basis; if there is no recovery, there is no fee.
If you have seen two sets of invoices at your company — a real one and one submitted to customs — we are available for a confidential consultation. The initial call costs you nothing and may be the most important legal conversation you have this year.
