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.
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A recently filed lawsuit in D.C. federal court seeks to compel CBP testimony in a long-running case brought against an importer by a company founded to file customs fraud lawsuits. Customs Fraud Investigations says CBP is refusing to send an officer to testify in a False Claims Act whistleblower suit in Eastern Pennsylvania U.S. District Court on whether Victaulic failed to properly mark its pipe imports, and should have paid marking duties (see 1610060030).
The Department of Justice and Temple St. Clair reached a $796,000 settlement to resolve allegations of civil fraud, the DOJ said in a news release. Temple St. Clair, "a fine jewelry designer, manufacturer, and importer based in New York, New York," was alleged to have undervalued its goods at import, the DOJ said. The company's senior leadership also allegedly carried jewelry, including a pendant valued at $83,000, into the U.S. for commercial purposes without declaration, the DOJ said. The lawsuit was initiated by a whistleblower under the False Claims Act, it said.
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Acting Associate Attorney General Jesse Panuccio pointed to the whistleblower provisions in the False Claims Act as an important method for enforcing customs laws. The Justice Department is using the FCA "to prevent companies from flouting our customs laws," he said in a June 14 speech at an American Bar Association event on qui tam enforcement. "Over the last five years, the Department has recovered more than $100 million in settlements involving the evasion or underpayment of import duties for a wide variety of merchandise." Panuccio said DOJ will also use the FCA "against any entities involved in the opioid distribution chain who engage in the abuse and illegal diversion of opioids -- from pharmaceutical manufacturers and distributors, to pharmacies, to pain management clinics and physicians."
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A federal court recently dismissed a whistleblower lawsuit filed over pipes imported from China that were allegedly misclassified in order to avoid antidumping and countervailing duties. The May 23 decision in U.S. District Court for the Northern District of Illinois Eastern Division was highlighted in a Hogan Lovells blog post. The False Claims Act (FCA) lawsuit was filed by Roger Schagrin, a lawyer with experience in international trade and the steel industry, in 2014 against LDR Industries. Plaintiffs in successful whistleblower lawsuits involving defrauding the government are allowed to receive a portion of the recovered funds.
A recently announced Justice Department policy limits the circumstances under which companies can be held liable for violating agency guidance documents. Issued Jan. 25, the policy memo prohibits DOJ lawyers from enforcing agency guidance documents as if they were binding in “affirmative civil enforcement cases,” including False Claims Act lawsuits. The new policy extends across government a policy adopted in November that prohibited DOJ from issuing binding guidance on its own behalf or enforcing its own guidance as binding.