Third Settlement – Another Customs-Related Qui Tam Action

Dear Friends,

Further to our emails below, we wanted to let you know about a third settlement stemming from a False Claims Action (FCA) case that we brought to your attention back in 2013.

Since the initial November 2013 announcement, the U.S. Department of Justice (DOJ) has collected more than $4.58 million in settlement payments to resolve allegations that 5 companies and 2 individuals participated in schemes to intentionally file false customs declarations to avoid the payment of antidumping duties (ADD) and countervailing duties (CVD) on Chinese-origin aluminum extrusions.  As of February of this year, 4 of the 5 companies (but neither individual) had settled.

Last week, DOJ announced that the individuals named in its November 2013 press release had agreed to pay $435,000 to resolve allegations regarding their participation in these schemes (the individuals agreed to pay $385,000 and $50,000, respectively).  More specifically, the two individuals were alleged to have: (1) conspired with domestic importers to submit false information to evade the duties; and (2) formed a company to act as the importer of record for the goods in an attempt to shield the real importers from liability.  A copy of the press release can be found here.

The significance of this settlement is that it highlights the government’s willingness to prosecute not only companies for customs noncompliance, but the individual employees involved in the noncompliance as well (one of the individuals here was a U.S. sales representative).  In announcing this settlement, Principal Deputy Assistant Attorney General Benjamin C. Mizer confirmed that the DOJ is “pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including individuals who make such evasion possible by the businesses that import the goods”.

We hope this is helpful.  If you have any questions, or would like to discuss these issues further, please let us know.

Best regards,

Ted

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