German company KingKong-Tools GmbH & Co KG, along with its American subsidiary King Kong Tools, will pay $1.9 million to resolve allegations of customs fraud, the U.S. Attorney's Office for the Northern District of Georgia announced. The office alleged that King Kong falsely said its tool imports were made in Germany when they were made in China, misrepresenting their country of origin in violation of the False Claims Act.
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New Hampshire-based furniture seller Yogibo will pay $217,832 to settle charges it violated the False Claims Act by "failing to pay customs duties on imports from China," the U.S. Attorney's Office for the District of Massachusetts announced July 26. The case was brought by David Kohlenberger, a whistleblower and former senior logistics and warehouse manager for Yogibo from 2017 to 2021, who will receive 20% of the settlement.
Defendants in False Claims Act cases still have a valid defense in light of the U.S. Supreme Court's recent ruling in U.S. ex rel. Schutte v. SuperValu "if there is objective ambiguity" in the law and there exists a "genuine subjective belief in the validity of the claim," Akin Gump lawyer Robert Salcido said in a blog post. FCA defendants also have a valid defense if they "acted with mere negligence or inadvertence," Salcido added, explaining the plaintiff must show that the defendant acted with a "substantial and unjustifiable risk."
John Summers, former assistant U.S. attorney for the Northern District of Texas, has rejoined Caldwell Cassady as a principal, the firm announced. Summers draws from his experience as an assistant U.S. attorney prosecuting False Claims Act and qui tam complaints related to customs, procurement and healthcare fraud, the firm said.
South Korean company Anyclo International pleaded guilty to evading customs duties on clothing it imported, agreeing to a civil settlement with the U.S. under which it will pay $2.05 million to the U.S. in restitution, the U.S. Attorney's Office for the District of New Jersey announced. A $250,000 criminal fine also was levied. Anyclo will pay the settlement, plus interest, over 15 months to resolve potential charges under the False Claims Act.
Seven attorneys and two international trade professionals, all from McDermott Will, joined Blank Rome's international trade practice group in Washington. The new lawyers are partners Joanne Osendarp and Eric Parnes, senior counsel Lynn Kamarck and Alan Kashdan, of counsel Conor Gilligan, and associates Tyler Kimberly and Brendan Saslow. Also joining are Jorge Miranda as trade economic adviser and Deborah Flinn as international trade manager, both from McDermott Will. Osendarp will co-chair the practice group with Anthony Rapa. The attorneys' practices involve trade remedy cases, export controls and sanctions proceedings and False Claims Act litigation, among other things, Blank Rome said.
A recent False Claims Act case brought over unpaid marking duties on imports of Mifeprex, the active ingredient for the abortion pill mifepristone, was filed by the Life Legal Defense Foundation in a bid to "take some gold out of Egypt," the foundation's lawyer Catherine Short told Trade Law Daily. "This company is making drugs that kill babies, and we were able to cut away some of their profit from that," Short said.
Danco Laboratories, a New York-based pharmaceutical distributor, will pay $765,000 to settle allegations it violated the False Claims Act by failing to pay marking duties on its imports of Mifeprex, the active ingredient for the abortion pill mifepristone, that lacked country of origin markings, DOJ announced April 12.
International Trade Today is providing readers with the top stories from last week in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.