Reports of overpayments bring federal audit of shrimper payments

Published 7:26 pm Tuesday, January 2, 2007

A federal audit is planned for Gulf Coast shrimpers and seafood processing houses following reports of overpayments on their shares in an imported shrimp lawsuit settlement.

Shrimp boat owner Colleen Brown of Tarpon Springs, Fla., received a tariff payment check in December from the Bureau of Customs and Border Protection for $2.1 million when she’d expected $210,000, according to customs records.

Shocked at the payment mistake, she returned the check.

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Brown’s was one of two Tarpon Springs businesses overpaid a total of more than $3 million by the federal government, said John Williams, executive director of the Southern Shrimp Alliance (SSA), the eight-state domestic shrimp industry coalition that won the tariffs two years ago through a federal lawsuit against shrimp exporters in six countries.

On her application for payment, Brown put a decimal in the wrong place.

“And no one would have caught the mistake if she hadn’t been honest and sent it back,” Williams told the Press-Register for a story Sunday.

Williams and the SSA say that Customs and the Border Patrol simply didn’t audit the hundreds of applications sent by shrimpers in 2005, seeking a cut of the more than $20 million collected from the shrimp tariffs.

Since the lawsuit was filed, 1,211 applicants, including both companies and individuals, requested a total of $298 million in Byrd amendment payouts. The average request was $246,423, according to customs documents. That means the average check was about $18,481 and the total amount sent to the industry was about $22 million, according to the documents.

The SSA has requested businesses be given a “grace period” to do their own audit before Customs officials arrive in order to avoid prosecution for honest mistakes, Williams said.

Customs officials have not said whether they will grant such a grace period, he said.

In January 2005, U.S. shrimpers, whose harvest is worth about $560 million a year, won a lawsuit seeking tariffs on imports from China, India, Ecuador, Thailand, Vietnam and Brazil. Under the tariff law known as the Byrd Amendment, U.S. shrimpers injured by the allegedly illegal pricing practices of those countries stand to receive payments from the tariffs.

At the urging of the SSA, Customs officials have agreed to audit every claim this winter and hope to begin recouping any overpaid funds from their recipients sometime after January, Williams said.

Customs officials have said those funds will be pooled and redistributed to the trade lawsuit’s supporters, Williams said.

Customs spokesman Eric Blum said Friday that the agency has agreed to conduct such an audit, but refused to provide or confirm any details because the investigation may result in federal fraud prosecution.