Michael Granston, former deputy assistant attorney general for the Commercial Litigation Branch in DOJ's Civil Division, has rejoined Covington as a partner in the False Claims Act investigations and litigation practice group, the firm announced. Granston worked at DOJ for nearly 30 years, serving as deputy assistant attorney general since 2019, where he managed litigation and enforcement of FCA, international trade and intellectual property matters. Before going to DOJ, he was an associate in Covington’s litigation and white collar practice groups.
DOJ launched a cross-agency "Trade Fraud Task Force" on Aug. 29 to "bring robust enforcement against importers and other parties who seek to defraud the United States," the agency announced. The task force will bring together attorneys from the agency's civil and criminal divisions, along with officials at CBP, to target tariff evasion and "smugglers who seek to import prohibited goods into the American economy."
Importer Allied Stone agreed to pay $12.4 million to settle claims that it violated the False Claims Act by evading antidumping duties and countervailing duties on quartz surface products from China, DOJ announced. The FCA case was initially filed by Melinda Hemphill, a whistleblower in the case, who will receive a $2,170,875 cut of the settlement.
Asking other countries to open their markets to more exports from the U.S. is causing significant changes to how countries have historically conducted trade, according to speakers on Gibson Dunn's Aug. 8 webinar "U.S. Trade Policy: Navigating Uncharted Waters."
Importers Global Plastics and Marco Polo International agreed to pay $6.8 million to settle claims that they violated the False Claims Act by knowingly failing to pay customs duties on plastic resin from China, DOJ announced. The U.S. said Global Plastics and Marco Polo, both subsidiaries of MGI International, received credit for "cooperating with the government."
Importer Grosfillex agreed to pay $4.9 million to settle claims that it violated the False Claims Act by evading antidumping and countervailing duties on items made with aluminum extrusions from China, DOJ announced. The FCA case was initially filed by Edward Wisner, a former employee of Grosfillex and whistleblower in the case, who will receive a $962,662.74 cut of the settlement.
The U.S. filed a complaint on July 15 in a case against importer Global Office Furniture and its owner Malcom Smith for allegedly violating the False Claims Act by knowingly underpaying duties on imported office chairs, the U.S. Attorney's Office for the District of South Carolina announced. The case was originally filed in March 2020 by Sharon Joyce, former office manager for Global Office Furniture (United States v. Global Office Furniture, D.S.C. # 2:20-01223).
DOJ's criminal division has identified trade fraud as a top priority, assigning its market integrity and major frauds unit to handle tariff evasion cases, a DOJ official confirmed to us. The official said that the major frauds unit is shifting resources to trade and looking to cases involving "long-running frauds, senior executives, and large volumes of alleged losses from unlawful tariff evasion schemes."
The U.S. Court of Appeals for the 9th Circuit's recent ruling in a trade-related False Claims Act case likely will create more customs fraud enforcement led by private parties and should lead importers to be extra wary that they are complying with U.S. trade laws, various laws firms said. The case is Island Industries v. Sigma Corp. (9th Cir. # 22-55063).
The U.S. Court of Appeals for the 9th Circuit on June 23 upheld a jury's determination that importer Sigma Corp. is liable under the False Claims Act for lying about whether its imports were subject to antidumping duties. Judges Michelle Friedland and Mark Bennett said no errors of law were made against Sigma and that the federal district court, not the Court of International Trade, had jurisdiction in the case (Island Industries v. Sigma Corp., 9th Cir. # 22-55063).