Automaker learns import fraud comes at a steep price
By Paul Koscak
Volkswagen recently made history thanks in large part to U.S. Customs and Border Protection.
It’s the sort of history the company likely never expected—earning the largest customs penalty ever, which cost the automaker $4.3 billion in fines for fraudulently importing vehicles rigged to thwart U.S. emissions standards.
Volkswagen added a software package to thousands of its vehicles that modified the engine’s exhaust when it detected the vehicle was undergoing an emission test. The scheme and the cover-up made international news in 2016. Meanwhile, six top Volkswagen executives await a court ruling on criminal charges for continuing the ploy that allowed the import of at least 590,000 vehicles over almost a decade.
Levied by CBP, the record penalty was part of a settlement with the agency, the Environmental Protection Agency and the Department of Justice after Volkswagen pleaded guilty to criminal customs fraud.
CBP not only enforces customs laws and regulations, it enforces health, safety and border security violations for other government agencies.
The cover-up became the crux of the crime and why CBP played a major role in the outcome.
Trust is central in the way CBP regulates trade and expects importers to operate with integrity because of the massive volume of goods imported into the country every day.
"We can’t look at everything," said Jerry Malmo, the Office of Trade’s director of the Civil Enforcement Division. "We trust companies are good corporate citizens and have good internal controls. This was quite a breach of that trust."
Volkswagen’s blatant disregard for that principle was the driving force in CBP’s strong stance for the huge penalty.
That bond was broken when "Volkswagen entities lied by submitting false information and omitting important information on importation," said Lesleyanne Koch Kessler, deputy associate chief counsel, enforcement and operations, for CBP’s Office of Chief Counsel. "This was a border security issue. We need to know what’s coming into our ports."
CBP first learned about the deception in September 2015, when the EPA cited the automaker for violating the Clean Air Act by not disclosing that numerous models—including Audi and Porsche—were equipped with "auxiliary emission control devices," software designed to defeat emissions tests. That would have required the company to report its own cover-up, an unlikely event.
On the road, the devices allowed engines labeled as EPA compliant, including the advanced technology vehicles the automaker touted as "green," to pollute way over the authorized limit. "Volkswagen claimed they had valid EPA certification on importation," Kessler said.
CBP immediately took custody of more than 16,000 fraudulently imported models, impounding them at ports of entry and other sanctioned areas throughout the country and launched an investigation to determine the scope of the violation.
It was an immense effort. Led by CBP’s Automotive and Aerospace Center of Excellence, experts from the Offices of Field Operations, Trade, and Chief Counsel formed a trade enforcement team that invested more than a year searching for evidence. Summonses were issued to Volkswagen importers to turn over customs entry documents. "We wanted to know what they knew," Kessler said.
The team spent countless hours reviewing thousands of records to determine how many vehicles were involved, the models and their combined value, factors that also contributed to the record fine.
Collaboration was central to the team’s success, explained Lisa Wallace who directs the Automotive and Aerospace Center of Excellence and Expertise. All offices and divisions connected to the investigation pooled their resources, worked as a unit and communicated frequently through conference calls.
"We were efficient," she said. "This helped us to stay on track. We shared updates and talked together about steps to take next." The team approach was so effective it’s now among the center’s best practices and is being used on new cases under review, Wallace added.
Kessler called the group "an excellent example of interoffice coordination for enforcement."
Within the $4.3 billion settlement, Volkswagen paid $1.45 billion in civil penalties for customs and Clean Air Act violations and $2.8 billion in criminal penalties.
Malmo said CBP stood prepared to litigate if the automaker refused to settle.
Volkswagen’s membership in CBP trusted trader programs, which streamline the importing process, was revoked. The Office of Trade offers these benefits to importers who can show their supply chains are secure. Volkswagen would need to reapply for those privileges.
"The Volkswagen settlement sends a powerful message to importers around the world," said Scott Falk, CBP’s chief counsel. "If you violate our customs laws and breach our trust, you’d better be prepared to pay a heavy price."
New Border Patrol Chief Takes Charge
By Jayna Desai
Ronald D. Vitiello never rode a horse until he joined the U.S. Border Patrol.
Growing up in a suburb of Chicago, and also in San Diego, he knew more about hot rods and baseball than saddles and spurs; more about walking beautiful beaches than the streets of Laredo. The only peripheral connection? His childhood game of "Cowboys and Indians."
It’s been more than 30 years since newly sworn-in Vitiello first put on a green uniform and entered on duty as a U.S. Border Patrol agent in 1985, as a member of Class 174.
He now leads one of the most important law enforcement organizations in the world. The Border Patrol, under its parent agency of U.S. Customs and Border Protection, secures the nation’s borders across 6,000 miles of Mexican and Canadian international land borders and 2,000 of coastal waters surrounding the Florida Peninsula and the island of Puerto Rico.
"This type of work always interested me," said Vitiello. "My dad’s older brother was in World War II as part of the Army’s celebrated 10th Mountain Division. He was a Chicago police officer when I was a kid. I was fascinated by all of the gear, the stories and the symbolism. His life’s work definitely made an impact on my decision and fueled my passion."
Vitiello was born on July 30, 1963, in Addison, Illinois, to Robert and Regina Vitiello. He is a middle child with one older brother and one younger sister. Vitiello is the son of a first generation father whose parents came from Italy. His mother and her family moved to the U.S. from Lithuania. In 1977, he and his family moved from Addison to San Diego following his freshman year of high school because his father worked with United Airlines, which was expanding to Southern California.
After high school, Vitiello enrolled at Grossmont Community College in San Diego and studied law enforcement. He met a former assistant chief from the San Jose, California, Police Department who worked at the college and encouraged him to apply for a role with the Border Patrol. He helped the 21-year-old navigate through the recruiting process leading to the position that changed his life.
It was in the Laredo Sector of Texas that Vitiello began his Border Patrol career. Since then, he and his family weaved their way across the country, through Texas, Arizona and Vermont; and, through the cities of Laredo, Dallas, Nogales, Swanton, McAllen, Mexico City and Washington, D.C.
Vitiello’s first trip home after completing his training at the Border Patrol Academy (1985). Photo courtesy of Vitiello family
Vitiello receives the Oath of Office by DHS Secretary John Kelly, becoming the 17th Chief of the U.S. Border Patrol. Photo by Donna Burton
"I saw the work that the Border Patrol did in the media while living in San Diego, but when I got to Laredo, it was a completely different culture," Vitiello said. "It’s a change in lifestyle rather than just some job that you have. And it was important for me to learn the Spanish language as well. Because everybody in town knows who you are and what you do, being able to speak Spanish influences every interaction in Laredo that you have."
Before starting his career, Vitiello told his friends and loved ones he had no plans to leave San Diego. That the only way he would take a job with the Border Patrol is if he were stationed close to home. Much to his mother’s astonishment, his feelings quickly changed once the official acceptance letter came. The move proved to be momentous, both professionally and personally. Vitiello met his wife, Nuri, in Laredo in 1986. He considers her to be an incredible support system in his life. They have been married for 29 years and have two children. Their daughter, Alexis, 24, graduated from James Madison University with an English major and creative writing minor. She is currently an au pair in Paris, France. Their son, Ron Jr., 20, is currently attending the International Culinary Center in New York.
"We met through a mutual friend when I was attending Laredo Junior College and he was a Border Patrol agent," Nuri said. "Even though I grew up in the border town of McAllen, Texas, I had no idea what the Border Patrol did or was until I met Ron."
Despite the complexities of the role, and knowing that she might have to follow her husband to other parts of the country as part of his duties, Nuri knew she wanted to marry Vitiello. She said she was comfortable making the required sacrifices, knowing the importance that he placed upon serving his country.
Ron is my best friend," Nuri, 52, said. "We love spending time together and enjoy just sitting out on our deck, having a drink, and talking. I am in awe of the father and husband he is. To this day, my kids nor my husband can remember a birthday, holiday, or special event he was not able to attend. I never complained to my kids about their dad’s work. I made it very clear we were lucky to have a father that worked hard so we could enjoy a comfortable life."
After Ron Jr. turned 2 years old, they made a joint commitment to maintain a steady family life and discussed the possibility of Nuri becoming a stay-at-home mother and wife.
"Ron and I talked about how important it was for our kids to have some stability and as a stay-at-home mom, this would be the one thing that was consistent in their lives," Nuri said. "Since my parents were business owners, this was not a life I was used to, but I understood why my husband wanted this for our family. And so did I."
From the first day she met him, Nuri could see how much Vitiello invested in the Border Patrol and because he always gave the organization his best, he did not mind moving from state to state and working long hours. She believes this is the right time for him to become chief and the right thing for the entire Border Patrol family.
Erica Aguilar has known Vitiello and Nuri for six years and considers them close friends. Her husband, Border Patrol Agent Luis Aguilar, was killed in the line of duty on Jan. 19, 2008. Though Vitiello did not know her husband personally, she said he remembers the day her whole family, as well as the Border Patrol family, was notified of her husband’s death.
"I’ve had many special moments with the Vitiellos," Aguilar said. "The last thing that my daughter, Arianna, did with her dad was learn how to ride a bike. She always hesitated to get back on a bike again after his death, but Ron helped her overcome her fear. He was so patient with Arianna and was right there by her side, constantly reassuring her. I have complete faith in him as chief because he is genuine and inspirational. He knows the way of a Border Patrol agent so he can show the way to 21,000-plus agents."
CBP Acting Commissioner Kevin K. McAleenan shares the same sentiment. He has known Vitiello for 14 years and describes him as "a tremendous law enforcement leader" who brings a wealth of experience to the position.
"He has done it all," McAleenan said. "From starting as a frontline agent in Laredo and progressing through the ranks, representing CBP at the Department of Homeland Security, serving as a chief patrol agent in Rio Grande Valley, and serving as deputy and acting chief of the Border Patrol at headquarters. No one could be more prepared for this critical role at this key moment. Under Ron’s stewardship, we will have significant opportunities to continue to enhance our mission effectiveness and support our agents in the field."
Vitiello standing next to one of his first seizures in the Laredo North Station, Texas (1985). Photo courtesy of Vitiello family
Vitiello trains to become a driving instructor at the Border Patrol Academy in Glynco, Georgia (1989). Photo courtesy of Vitiello family
Vitiello said one of his top priorities as chief is to address the concerns that Border Patrol employees expressed through the recent Human Capital Study.
"We have our share of difficulties, but people should have absolute clarity when it comes to our mission," he said. "Employee contributions and ideas are important and I intend to provide our workforce with the information, tools, and support they need to succeed at their jobs. I want to empower our employees through the voice I have at headquarters."
Border Patrol Chief of Law Enforcement Operations Directorate Scott Luck, who has worked in the organization for almost 31 years, believes Vitiello is an ideal choice to move Border Patrol’s agenda forward. He and Vitiello first met in the early 1990s when they were detailed as instructors for driver training at the Border Patrol Academy in Artesia, New Mexico.
"Chief Vitiello is the best selection in the country for this position," Luck said. "His breadth of knowledge with particular subject matters is extensive, having been a Border Patrol agent trainee and going through the ranks and serving his time with each one of those positions. He brings a lot of credibility to his leadership style. And he’s just genuinely a good person. I believe in him. I wouldn’t be here if I didn’t."
Vitiello realizes there are challenges ahead. But, with the support of his family and friends, he is ready for them. He lists capacity building and working with foreign partners as some of Border Patrol’s greatest achievements.
Some of the biggest challenges? Attrition, hiring, and how President Trump’s proposed border wall will change communities. The nation’s immigration laws will also remain in the spotlight.
"We execute our mission within the framework and the policies that are given to us, either through the law, our own developments, or through priorities of the executive branch," Vitiello said. "But in order to fulfill this mission, people must trust us. Most agents approach undocumented border crossers with a high degree of compassion. We’re the first ones that these individuals see on their journey and we’re the ones responsible for their well-being and safety. I don’t think the public understands how agents are often put in a place where they do heartfelt things."
Vitiello said he is proud to be a part of Border Patrol and accepts the responsibility that comes with its leadership.
"I’ve been blessed in this career and have no regrets," he said. "Sure, I would like to make us better and have tried to do the best I could everywhere. But overall, the focus should remain on providing substantial protection and security at and between the ports, as well as having the capability to know what is happening, and to respond appropriately. The Border Patrol has had a long and storied history. Today, we are adding a new chapter and I am excited to be a part of its future."
Editor’s Note: Following the President’s appointment of Randolph D. ("Tex") Alles as Director of the U.S. Secret Service April 25, Acting Commissioner McAleenan announced that Ronald D. Vitiello will serve as Acting Deputy Commissioner until a permanent selection is made. Carla Provost will serve as Acting Chief of the U.S. Border Patrol.
Moving ahead with CBP's expertise
By Paul Koscak
U.S. Customs and Border Protection is driving the effort to design and construct a wall along much of the Southwest border with Mexico. The wall will be part of a comprehensive security barrier that includes lighting, cameras, sensors, other related technologies and all-weather roads.
The project fulfills President Donald Trump’s executive order to achieve operational control of the southern border by improving border security and immigration enforcement. CBP’s Office of Facilities and Asset Management has moved forward with a request for contractors to submit designs and prototypes for consideration, which generated a robust response.
Once contractors are selected, CBP will have them construct multiple prototypes--some made from reinforced concrete, others from unspecified materials designed to deter illegal U.S. entry. The prototypes, some potentially as high as 30-feet, will be constructed this summer in the San Diego Sector.
The structures will guide CBP in identifying the best materials, building methods and final designs before investing substantial money into the project, according to Karl Calvo, assistant commissioner for CBP’s Office of Facilities and Asset Management. "Plans call for no more than eight and no less than four" prototypes, he said, noting the arrangement gives CBP a try-before-you-buy advantage and an opportunity to evaluate the wall prototypes in actual field conditions.
Prototypes must meet U.S. Border Patrol requirements and withstand "destructive testing," Calvo said. That means Border Patrol agents will test the wall’s resistance. They will use power tools and other methods they expect border crossers to employ to break through the barrier.
CBP’s preconstruction analysis, planning and evaluation provides a roadmap to build a wall and barrier system that’s feasible, durable and cost effective, but also aesthetically pleasing when viewed from the north side.
"Border security is critically important to the national security of the United States. Aliens who illegally enter the United States without inspection or admission present a significant threat to national security and public safety," President Trump stated in his order, addressing one of the administration’s top priorities.
The president further stated the border barrier, "supported by adequate personnel along with added technology aims to prevent illegal immigration, drug and human trafficking and acts of terrorism." In meeting that goal, CBP is committed to hiring an additional 5,000 Border Patrol and more than 500 Air and Marine agents without reducing hiring and training standards.
"I’ve seen its impact and its effect on border security," said CBP Acting Deputy Commissioner Ronald Vitiello, on the improved barrier system during a recent visit to the Laredo Sector in Texas. "It will help agents be better prepared and safer, and it will reduce a lot of traffic that comes from the south."
While the barrier may impact some communities, Acting Deputy Commissioner Vitiello noted the end result is a safer border. "That’s a good thing for Mexico and that’s a good thing for us."
Loren Flossman, the director of the Border Patrol & Air and Marine Program Management Office (PMO) within the Office of Facilities and Asset Management, leads a team that will oversee construction, in partnership with the U.S. Army Corps of Engineers, and make final decisions, Calvo explained.
"The PMO will leverage lessons learned from the Pedestrian Fence 225 and Vehicle Fence 300 projects," said Flossman, tasks that installed steel fencing and crossed steel planks as road barriers. "We’ve retained the appropriate subject matter expertise and institutional knowledge to move forward swiftly in meeting USBP’s operational requirements and administration priorities."
CBP has long been involved in building border infrastructure. CBP maintains 705 miles of barrier. The border infrastructure is a mix of walls, pedestrian fencing, vehicle barriers, operational roads and lighting, depending on topography, operational requirements and other factors.