Joseph Bailey, CEO of children's clothing companies Stargate Apparel and Rivstar Apparel, is facing criminal charges over allegedly falsifying documents that were given to CBP upon import, the U.S. Attorney’s Office of the Southern District of New York said in a June 6 news release. Bailey is said to have submitted "invoices to CBP that falsely understated the true value of the goods his company imported," the Justice Department said. In addition to the criminal charges, Bailey and the companies face a civil lawsuit, DOJ said.
A chemical importer will not face penalties under the False Claims Act for an alleged antidumping duty evasion scheme, after a jury found in its favor in a trial at the Central California U.S. District Court. Unichem Enterprises and its owner, Tony Hang, were not proven to have violated the False Claims Act in a case brought by a whistleblower, David Ji, who based it on manifest data, the jury said. According to court documents, Ji had said Unichem imported glycine that its Chinese supplier helped it mislabel as glucosamine, which is not subject to AD/CV duties. Unichem and Hang had contended that Ji lacked enough evidence to prove his claims, and was pursuing the case “to put a competitor and former employee out of business.”
The Department of Justice and Selective Marketplace agreed to a settlement over allegations of illegal use of de minims exemptions, the DOJ said in a May 13 news release. The DOJ agreed to join the lawsuit in U.S. District Court for the District of Maine in March (see 1904190006) as part of a qui tam whistleblower suit. The company, which is based in England, will pay a total of $610,000 to resolve the suit, the DOJ said.
A pipe importer will pay $600,000 to settle a False Claims Act suit over its failure to pay marking duties, according to lawyers in the case. Victaulic had been accused by Customs Fraud Investigations LLC of failing to mark pipe fittings it imported from China and Poland and then failing to pay the 10 percent marking duty to CBP (see 14091119).
The Department of Justice on May 7 released a guidance document for its lawyers on the mitigation of penalties in False Claims Act cases. Under the new policy, “cooperation credit” in False Claims Act cases can be earned “by voluntarily disclosing misconduct unknown to the government, cooperating in an ongoing investigation, or undertaking remedial measures in response to a violation,” DOJ said in a press release. That applies even where the government has already launched an investigation if the misconduct being disclosed is not part of the government investigation’s scope, it said. DOJ will also take into account corrective action by companies, such as “undertaking a thorough analysis of the root cause of the misconduct, appropriately disciplining or replacing those responsible for the misconduct, accepting responsibility for the violation and implementing or improving compliance programs to prevent a recurrence,” it said. Cooperation credit will usually take the form of a reduction in the damages multiplier and civil penalties, DOJ said. There has been a general uptick in False Claims Act whistleblower cases related to customs violations in recent years (see 1806140044).
The Department of Justice recently agreed to intervene in a qui tam whistleblower lawsuit against Selective Marketplace Ltd. and the company's alleged use of de minimis exemptions for the expressed reason of avoiding customs duties, the DOJ said in a March 27 filing. The filing was in U.S. District Court for the District of Maine because "a substantial part of the events or omissions giving rise to the claims occurred in this District," the DOJ said. Selective, which is based in England, mostly sells premium womenswear under the Wrap London and Poetry brands, the DOJ said.
Byer California, a women's apparel wholesaler, reached a settlement agreement with the Justice Department over the company's alleged involvement in an undervaluation scheme, the U.S. Attorney’s Office for the Southern District of New York (USAO) said in a March 27 news release. Byer is said to have allowed one of its importers, Queen Apparel NY, to continue to use falsified customs forms despite being aware of the discrepancies, the Department of Justice said. The USAO said it also filed a civil fraud suit last month against Queen. Both cases stem from a whistleblower complaint that previously resulted in a major settlement (see 1607140056).
The Northern Illinois U.S. District Court on March 19 dismissed a False Claims Act duty evasion lawsuit against a now-bankrupt pipe company, but allowed the case against that company’s two owners to proceed. Larry and Dennis Greenspon allegedly had their company, LDR Industries, falsely declare imports of plumbing pipe as exempt from antidumping and countervailing duties on circular welded pipe from China, and also should have paid marking duties on the imports, the lawsuit says.
The owners of Blue Furniture are facing federal criminal charges for alleged evasion of antidumping duties on wooden bedroom furniture, according to an indictment filed Jan. 8 in the U.S. District Court for South Carolina. The owners, Yingquin Zeng and Alexander Cheng, are charged with conspiracy to defraud the U.S. and entry of goods by means of false statements, the indictment said. The federal prosecutors allege that Zeng and Cheng imported wooden furniture through the Port of Charleston and knowingly submitted documents that "falsely represented the furniture being imported from China was not subject to anti-dumping duties." The Florida company was previously hit with a False Claims Act civil lawsuit over the alleged evasion (see 1708150066). That lawsuit, which is at the U.S. District Court for the Western District of Texas, was stayed until Jan. 31 due to the criminal grand jury investigation in South Carolina, according to a Jan. 3 court filing.
International Trade Today is providing readers with some of the top stories for Oct. 29 - Nov. 2 in case they were missed.