Tag Archives: false claims act

Importer and company executives pay $5.2 million penalty under the FCA.

April 26, 2020 By in ADD/CVD, Attorney, DOJ, furniture, international trade, qui tam, Uncategorized, whistleblower Tags: , , , , , , , , , Leave a comment
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The DOJ recently announced a $5.2 million settlement from importer, Blue Furniture Solutions, LLC, based on alleged importation of merchandise into the United States using false descriptions and invoices that claimed the merchandise was not within the scope of the antidumping duties on wooden bedroom furniture from China.

A whistleblower under the FCA’s qui tam provisions exposed Blue Furniture Solution’s intentional misrepresentations totaling $1.7 million in antidumping payments. The US Department of Justice (DOJ) intervened under the FCA.

One year later, on April 20, 2020, the DOJ announced the $.52 million settlement – in which the company pays $4.7 million and executives pay $550,000 for personal liability. Information on this case can be found in the following: United States ex rel. University Loft Company v. Blue Furniture Solutions, LLTC et al., No. 15-CV-588-LY (W.D. Tex.). The related criminal matter appeared under the case name United States v. Zeng, No. 19-CR-64-DCN (D.S.C.).

If you believe an importer is misrepresenting their customs entry to save on AD duties, or if you are a subject of an FCA investigation, contact experienced customs and trade law attorney David Hsu at 832-896-6288 by phone or text; or email attorney.dave@yahoo.com.

Whistleblower against clothing importer awarded $170,000.

February 3, 2020 By in qui tam, relator, Uncategorized, whistleblower Tags: , , , , , , , , , Leave a comment
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Earlier this year, a whistleblower was awarded $170,00 for helping the U.S. Attorney’s Office for the Southern District of New York recover $1 million from Notations, Inc., a garment wholesaler from Warminster, Pennsylvania. Starting in 2017, Notations admitted to ignoring signs of import duty evasion by Yingshun Garments. Yingsun Garments imported clothing from China and submitted false invoices to CBP. The submission of false imports was at a 75% discount and designed to lower the amount of customs duties to be paid.

Unlike the usual customs false claims cases, the government did not go after the importer, but instead went after the reseller and purchaser instead of the usual foreign manufacturer and importer. Additionally, the whistleblower also received an award eevn though the whistleblower did not specifically mention Notations – instead the whistleblower’s report opened the door leading to an investigation of Novations.

The whistleblower learned through a family member of Yingshun and filed a qui tam law suit under the False Claims Act, 31 U.S.C. § 3729, qualifying the whistleblower as a relator to a lawsuit with a potential of an award ranging between 15% to 25% of any funds recovered.

If you or someone you know is aware of any false claims activity that may allow a company to under report the duties paid, contact experienced qui tam attorney David Hsu by phone/text directly at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Importer pays $500,000 fine for false claims to evade customs duties.

May 30, 2018 By in ADD/CVD, Customs Lawyer, Uncategorized Tags: , , , , , , , , Leave a comment
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Earlier in February of this year, the Department of Justice Office of Public Affairs released news of a settlement by Home Furnishings Resource Group Inc. agreement to pay $500,000 in settlement for False Claims Act allegations.

Background:
Home Furnishings Resource Group Inc. (HFRG) agreed to pay the $500,000 after they were alleged to have violated the False Claims Act on customs declarations in order to avoid paying antidumping duties (ADD) on “wooden bedroom furniture” imported from China.

Customs alleged the Hermitage, Tennessee company did not pay antidumping duties from 2009 to 2014 by misclassifying furniture as “non-bedroom” on import documents. By misclassifying as “non-bedroom”, HFRG did not pay the required ADD on wooden-bedroom furniture.

Why do we have antidumping duties?
Antidumping duties protect American manufacturers against foreign companies who make the same goods at a price below cost and “dump” the products into the US. The Department of Commerce (Commerce) is responsible for assessing whether goods are dumped into the US – and if so, assign an ADD amount to those imported goods.

The addition of a duty for these goods is to protect U.S. businesses and “level the playing field for domestic companies”.

The Department of Homeland Security’s Customs and Border Protection (CBP) then collects these duties – wooden bedroom furntiure’s ADD rate was 216% and non-bedroom furniture was not subject to any duty.

How was HFRG caught?
University Loft Company, a competitor of HFRG, used the whistleblower provision of the False Claims Act, permitting private parties to sue on behalf of the US against those who falsely claim federal funds or, as in this case, who avoid paying funds owed to the government. The act also allows the whistleblower to receive a share of any funds recovered. University Loft Company will receive approximately $75,000.

Do you know anyone violating the False Claims Act?
If you believe an importer has been misclassifying goods to avoid payment of duties, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.