Sea Star Lines and Horizon Lines will pay a total of $3.4 million to settle with the Justice Department over allegations of price fixing in violation of the False Claims Act, the DOJ said in a press release. Sea Star will pay $1.9 million and Horizon will pay $1.5 million, it said. "The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes," the agency said. "This information allowed the shippers to allocate specific routes between themselves at predetermined rates," affecting several government contracts. The companies have already pleaded guilty in a related criminal suit (see 11111822 and 11022522). Former Sea Star executive William Stallings, who worked as a whistleblower in the case, will receive about $512,719 of the funds, DOJ said.
The U.S. government on Jan. 8 told a federal court in New York that it intends to take part in a whistleblower suit against an apparel importer for underpayment of duties. The false claims suit alleges several affiliated apparel companies in New York underreported 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. That resulted in a loss of revenue to the federal government of at least $3 million per year in unpaid duties, says the complaint.
Ohio-based Basco Manufacturing will pay $1.1 million to settle allegations that it transshipped and mislabeled merchandise to avoid paying antidumping and countervailing duties on aluminum extrusions it imported from China, said the U.S. Attorney’s Office for the Middle District of Florida. The case is part of a larger False Claims Act whistleblower lawsuit against four companies and two individuals that imported aluminum extrusions manufactured by Chinese company Tai Shan. The government chose to intervene in the suit against Basco, California-based C.R. Laurence Co.; Florida-based Southeastern Aluminum Products Inc.; Texas-based Waterfall Group LLC; New York-based Northeastern Aluminum Corp.; Northeastern’s owner, William Ma; and Robert Wingfield, the U.S. representative of Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd.
International Trade Today is providing readers with some of the top stories for Nov. 12-15 in case they were missed.
Prior disclosures of customs violations don’t protect companies from False Claims Act whistleblower lawsuits, said the U.S. Attorney for the District of Colorado in a brief filed Nov. 8. The government filed the brief as part of a lawsuit brought by Colorado customs broker Bonnie Jimenez against her former employer OtterBox. Jimenez alleges OtterBox knowingly failed to include assists in the transaction value of cellphone cases it imported from China over a five-year period (see 13100701). She says she repeatedly warned top management at the company, and was eventually fired for her trouble. As the whistleblower in a False Claims Act case, Jimenez stands to share in the proceeds if the Colorado U.S. District Court assesses penalties and damages against OtterBox. The U.S. government hasn’t intervened in the lawsuit, and declined to take a position on OtterBox’s alleged misdeeds in its brief. But it said OtterBox’s prior disclosure did not begin a formal CBP penalty proceeding, and doesn’t preclude Jimenez’ whistleblower suit.
International Trade Today is providing readers with some of the top stories for Oct. 7-11 in case they were missed.
A customs broker is embroiled in a whistleblower suit against cellphone case seller OtterBox, alleging the company knowingly failed to include assists in the transaction value of merchandise it imported from China over a five-year period. Former OtterBox employee and licensed customs broker Bonnie Jimenez filed the False Claims Act suit at the Colorado U.S. District Court in 2011, but it wasn’t made public until about one month ago. She says she repeatedly told management that OtterBox was undervaluing cellphone cases that it imported from China, but that management deliberately ignored her pleas. OtterBox moved to dismiss the case on Sept. 25, saying that a prior disclosure of the violations filed with CBP before the Jimenez lawsuit protected it from a whistleblower case.
The Office of Inspector General (OIG) announced its newest division, the Office of Integrity and Quality Oversight (IQO) on Aug. 20. The new office is part of a “comprehensive reorganization of the OIG” and will manage matters related to the OIG Hotline, Whistleblower Protection, and Ombudsman programs, a press release said. Deputy Inspector General Charles Edwards added IQO will “further assure our stakeholders that compromises to the integrity of Department of Homeland Security programs and operations will be addressed in a manner that meets the highest ethical and professional standards” in a timely manner.
The 5th U.S. Circuit Court of Appeals found defense contractor Kellogg Brown & Root liable for penalties resulting from kickbacks paid by employees of two freight forwarders to win and maintain federal subcontracts. The decision reverses the Eastern Texas U.S. District Court’s finding that double penalties for knowing violations of the Anti-Kickback Act by employees don’t vicariously apply to the employer.
In a Foreign Corrupt Practices Act case involving bribery in Thailand, the 9th U.S. Circuit Court of Appeals said a jury doesn’t need to find financial loss to an identifiable victim in order for a judge to order restitution payments. A judge making that decision is enough, said Judge Alex Kozinski. The ruling affirmed a lower court order that Gerald and Patricia Green pay $250,000 in restitution for $1.8 million in bribes they paid while running the Bangkok International Film Festival. But the ruling left the door open to changes to the 9th Circuit’s handling of restitution cases in light of a recent Supreme Court decision.