The president and part-owner of a jewelry importer will pay $415,000 to settle a False Claims Act lawsuit that alleged his company undervalued entries in an effort to avoid paying duties, the Department of Justice said in an Aug. 3 news release. Anshul Gandhi, resident of New Jersey, admitted as part of the settlement that he knew of the customs fraud, avoiding a more than $7 million judgment entered in New York Southern District federal court that same day.
The Department of Justice reached an $8 million settlement agreement with CWD, which does business as Centric Parts, over questionable classifications of imported brake pads, DOJ said in news releases. The settlement resolves separate whistleblower complaints filed in Michigan and California. Centric is alleged to have misclassified mounted brake pads as unmounted brake pads upon import, DOJ said. Mounted brake pads have a 2.5% duty rate, while unmounted pads are duty-free.
A furniture importer and its executives will pay more than $5.2 million to settle a False Claims Act lawsuit on their alleged evasion of antidumping duties on wooden bedroom furniture by way of misclassification as metal furniture, the Justice Department said in an April 14 press release. Blue Furniture Solutions and its successor, XMillenium, will pay $4,679,987 of that total, while former CEO Yingqing Zeng will pay $460,000 and former CFO Alex Cheng $90,000 to resolve their personal liability, DOJ said.
International Trade Today is providing readers with some of the top stories for Jan. 21-24 in case they were missed.
The Department of Homeland Security will take several new steps toward preventing the importation of counterfeit goods, executive branch officials said during a Jan.24 press conference to discuss a report on the subject. Peter Navarro, a close White House adviser on trade, said of the report: “What they produced is both historic and transcendent. The guts of this are the 10 sets of government actions that will be implemented immediately.” But, he said, 10 best practices for private industry -- which are voluntary -- are as important, if not more important. He said that currently, the burden is on the intellectual property rights holders to police the internet, and the government to catch counterfeits in shipments.
The Justice Department is adding new lawyers to its international trade office, indicating that there could be an uptick in Section 592 penalty cases against importers, according to Crowell & Moring’s 2020 Litigation Forecast. The hiring comes amid increased scrutiny on valuation and country of origin issues as Section 301 tariffs incentivize importers to find ways to reduce duty liability. “This likely means that CBP has already determined that a significant amount of penalty cases are not going to be resolved administratively and will proceed to litigation,” said David Stepp, a customs lawyer with the law firm.
International Trade Today is providing readers with some of the top stories for Jan. 6-10 in case they were missed.
Xing Wei received $170,000 for her role as a whistleblower in a customs duty evasion case settled between the Justice Department and a garment wholesaler in 2017 (see 1710030048), Wei's lawyer Timothy McInnis said in a news release. Notations, the wholesaler, admitted to failing to prevent the obvious customs fraud committed by importer, Yingshun Garments (see 1609280038), as part of the settlement. McInnis said the settlement is significant for two reasons. “First, the government pursued duties fraud claims against a US-based 'downstream' commercial purchaser and re-seller, not just the foreign manufacturer and importers,” he said. “And, second, the whistleblower received an award for opening the door to the investigation and later helping uncover Notations' role even though her qui tam complaint did not name Notations specifically.” Asked why it took so long after the 2017 settlement for Wei to receive her portion, McInnis said by email that “there is no specific reason for the delay” and that some things “just take time.”
An Italian textile manufacturer and its U.S. subsidiary will pay $650,000 to settle allegations in a False Claims Act whistleblower lawsuit that it artificially used “sham intermediary ‘sales’” to underpay duties, the U.S. Attorney’s Office for the Southern District of New York said in a Sept. 12 press release. Miroglio Textile declared on customs documentation that it sold fabric to Miroglio USA at arbitrarily discounted prices, when it was actually selling it directly to consumers at higher prices than it declared.
A California federal court on June 10 declined to hand victory to a whistleblower suing his former employer for allegedly undervaluing imports of herbal supplements to evade payment of customs duties. Travis Kiro, a former account manager for Jiaherb, did not prove that Jiaherb knowingly mislabeled its shipments to pay lower duties to CBP, the Central California U.S. District Court said in the decision.