Whistleblower Gets Over $2 Million From Apparel Undervaluation Settlement
An employee of a New York apparel importer will receive over $2 million for his role in bringing a whistleblower lawsuit against his employer for customs fraud. Michael Krigstein, who according to court documents has been a garment cutter at Dana Kay since 2006, had filed a lawsuit that eventually resulted in a $10 million settlement agreed to by the U.S. government, Dana Kay and Siouni and Zarr to end a False Claims Act case in the U.S. District Court for the Southern District of New York related to undervaluation of apparel imports.
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Under the settlement announced in early April (see 14041026), Dana Kay and Siouni and Zarr admitted to underdeclaring the value of their imported apparel between 2003 and 2012. The entire purchase price of the apparel would not be declared on the commercial invoice provided to their customs broker for use in CBP entry documentation. Instead, a second bill called a “debit-note” would be created, and part of the purchase price would be billed on this second invoice. The second invoice was not provided to CBP, so only the first invoice was used to determine dutiable value. “Through this fraud, the defendants avoided paying millions of dollars in customs duties,” said the attorney’s office.
Krigstein had filed the whistleblower suit in 2011 in the Southern New York U.S. District Court against Alan Hakimian and Afshin Hakimian, and their companies Siouni and Zarr, Danny & Nicole, and Dana Kay. The case remained sealed until December 2013, and the U.S. government announced it would prosecute the case in January (see 14011023). Under the False Claims Act, whistleblowers are eligible for a share of the proceeds from a civil suit. Krigstein will get $2,095,817.48 out of the $10 million settlement.
Email ITTNews@warren-news.com for a copy of the court order.