A federal judge unsealed documents related to antidumping duty evasion allegations brought by a third party after the Department of Justice declined to get involved, recent court filings show. The lawsuit, brought by Customs Fraud Investigations (CFI), claimed that Mueller Industries and a subsidiary schemed to "fraudulently import its standard pipe as line pipe" to avoid antidumping duties on the product. The complaint, filed in 2014, was unsealed on Sept. 15 in U.S. District Court for the North District of Illinois Eastern Division.
A Chinese apparel exporter agreed to pay more than $13 million to settle allegations that it engaged in a double-invoicing scheme that resulted in the underpayment of millions of dollars in duties, ICE said (here). Motives Far East and Motives China, along with their U.S. affiliate Motives, Inc., admitted that they worked with U.S. wholesalers to create the false invoices, and filed some of them with CBP on their own entry summaries, settling a False Claims Act suit filed by an undisclosed whistleblower. The settlement (here) was approved July 12 in Manhattan federal court, the U.S. Attorney’s Office for the Southern District of New York said (here).
Z Gallerie, an upscale furniture retailer, agreed to pay $15 million to the U.S. government as part of a settlement related to allegations of antidumping duty evasion, said the Justice Department in a news release (here). Z Gallerie, which sells furniture in stores and over the Internet, allegedly "engaged in a scheme to evade customs duties on imports" of wooden bedroom furniture from China, in violation of the False Claims Act," said DOJ. As an example of the alleged fraud, the DOJ said the company "sold certain Bassett Mirror Company products, including a six-drawer dresser and three-drawer chest, as part of a bedroom collection; however, these goods were misidentified on CBP documents, using descriptions such as 'grand chests' and 'hall chests,' in order to avoid paying antidumping duties on wooden bedroom furniture." Such settlements are likely to increase as "streamlined processes" for duty evasion allegations take effect a result of the Trade Facilitation and Trade Enforcement Act, said CBP Commissioner Gil Kerlikowske. The allegations originally came from Kelly Wells, an e-commerce furniture retailer, who will receive $2.4 million of the settlement under the qui tam provisions of the False Claims Act, said DOJ. "The claims resolved by this settlement are allegations only; there has been no determination of liability," DOJ said.
A New York importer and a defense contractor will together pay $8 million to settle allegations that the companies sold defective countermeasure flares made from illegally imported magnesium to the U.S. Army, said the Justice Department on March 28 (here). The importer, ESM Group, will pay $2 million of that total to resolve a whistleblower lawsuit brought by a competitor that alleged it misrepresented the content of its magnesium powder to avoid antidumping duties.
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Three Pennsylvania importers and their corporate officers will pay $3 million to settle another importer’s whistleblower lawsuit that alleged the companies evaded antidumping duties, said the Justice Department on Feb. 22 (here). Graphite Electrode Sales, purportedly the largest importer of the product in the U.S., alleged in a False Claims Act suit that Ameri-Source International, Ameri-Source Specialty Products, Ameri-Source Holdings, corporate officers Ajay Goel and Thomas Diener, and a cross-owned importer, SMC Machining, engaged in the duty evasion scheme. Per the terms of a settlement agreement, the importers pleaded guilty Feb. 22, some 10 days after the government joined the case.
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A furniture importer agreed to pay $15 million to settle a False Claims Act lawsuit that alleged it submitted false entry documentation in an effort to avoid antidumping duties on wooden bedroom furniture from China, said the Justice Department in a Dec. 21 press release (here). University Furniture and its Freedom Furniture Group allegedly classified its imported furniture as office furniture between 2009 and 2012, despite selling the furniture in the student housing market for use in dormitory bedrooms, said DOJ.
The Justice Department announced on Sept. 4 that it settled two more False Claims Act whistleblower suits related to evasion of antidumping and countervailing duties on aluminum extrusions from China, with Robert Wingfield of Texas and Bill Ma of New Jersey agreeing to pay $385,000 and $50,000, respectively (here). According to DOJ, Wingfield, the U.S. sales representative for Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd., “conspired with domestic importers to submit false information to the government to evade duties” by misrepresenting the Chinese extrusions as goods of Malaysia. Ma formed a company to act as importer of record “in an attempt to shield the real importers from liability,” said DOJ. The two settlements are the latest in a series that stem from the allegations of James Valenti, the CEO of sourcing consultant World Trade Group (see 13111924 and 1502170019).
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