International Trade Today is providing readers with some of the top stories for 2014 in case they were missed.
The U.S. Court of Appeals for the D.C. Circuit recently affirmed the dismissal a False Claims Act lawsuit alleging customs fraud by several major office supply retailers. An anonymous “pencil industry insider” had claimed Staples, OfficeMax, Target and Industries for the Blind had misreported the country of origin on entries of pencils that should have been subject to antidumping duties. In its Dec. 2 decision, the Appeals Court affirmed the District of Columbia U.S. District Court in finding the lawsuit was invalid because it was based on publicly available information.
The Eastern Pennsylvania U.S. District Court recently dismissed a whistleblower lawsuit brought against an importer by a company that appears to have been founded solely to find cases of customs fraud. Customs Fraud Investigations (CFI) alleged that Victaulic Company imported iron and steel pipe fittings without properly marking them, and then left payment of marking duties off of its entry documentation. District Judge Mary McLaughlin ruled CFI’s allegations, which were based on research conducted on eBay listings, were too threadbare to prevail.
Samsung Electronics America will pay $2.3 million to settle with the Justice Department over allegations of providing inaccurate country of origin claims to resellers, the DOJ said in a press release. The company was accused of causing "the submission of false claims for products sold on General Service Administration (GSA) Multiple Award Schedule (MAS) contracts in violation of the Trade Agreements Act," said the release. "Samsung caused resellers of its products to sell items on their GSA MAS contracts in violation of the TAA by knowingly providing inaccurate information to the resellers regarding the country of origin of the goods," the DOJ said.
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.
A German company will pay a $1 million fine and donate another $250,000 to an environmental fund for failing to report an open crack in its hull that may have allowed fuel to leak into the Port of Long Beach, said the U.S. Attorney’s Office for the Central District of California. Herm. Dauelsberg GmbH pleaded guilty in California Central District Court for failing to maintain accurate records related to the disposal of fuel oil, and failing to report a hazardous condition aboard the M/V Bellavia. The charges were brought as a whistleblower suit by four crew members of the Bellavia. They provided pictures and videos of discharges from the fuel tank to the Coast Guard. The sailors will get to keep $500,000 out of the penalty amount. The $250,000 donation will go to the Channel Islands Natural Resources Protection Fund.
Correction: OtterBox denies the allegations in a customs broker's whistleblower lawsuit it recently settled for $4.3 million, and did not admit to the violations under the settlement (see 14042222). "OtterBox denies the contentions of the qui tam complaint filed in 2011 by former employee Bonnie Jimenez and asserts that at no time has the company knowingly underpaid customs duties," said an OtterBox spokesman. "As the government acknowledges, this matter was based solely on allegations and the case was settled with no admission of liability."
Cellphone case maker OtterBox paid $4.3 million to settle a whistleblower suit brought by a customs broker and former employee that alleged the company failed to account for the value of assists when it paid customs duties, said the U.S. Attorney’s Office for the District of Colorado on April 21. The broker, Bonnie Jimenez, alleged that her former employer knowingly disregarded the value of engineering work and molds on entry documentation it submitted between 2006 and 2011. The government agreed, and decided to intervene on her behalf. Jimenez will receive $830,000 out of the settlement for her trouble. OtterBox did not admit guilt as part of the settlement, and a company spokesman later denied the charges in the complaint.
A group of related apparel importers will pay $10 million to settle charges that they falsified entry documentation to avoid paying import duties, said the U.S. Attorney’s Office for the Southern District New York on April 9. Siouni and Zar Corp. and Dana Kay admitted to underreporting the dutiable value on invoices provided to CBP for imports of women’s apparel by using a second, unreported invoice for part of the purchase price. The complaint said the false invoices resulted in $3 million per year in unpaid duties.
A California importer has paid $1.2 million to settle a False Claims Act lawsuit that alleged it fudged entry documentation, said the U.S. Attorney’s Office for the Northern District of California on March 12. Bizlink Technology, an importer of computer cable assemblies located in Fremont, California, allegedly underpaid customs duties on goods it imported from China based on false invoices. A whistleblower that used to work for the company brought the lawsuit and will share in the proceeds.