US Joins Whistleblower's Customs Fraud FCA Case on Apparel Imports
The U.S. joined a case against importer Barco Uniforms, companies that supply Barco and the two individuals that control the suppliers for allegedly violating the False Claims Act by knowingly underpaying customs duties on apparel imports, DOJ announced. The suit was originally filed in 2016 under the FCA's whistleblower provision by Toni Lee, the former director of product commercialization at Barco. The U.S. intervened in the case, filing a complaint on April 11.
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Barco sells uniforms to restaurants and health care providers and is supplied by various companies that manufacture apparel overseas, including in China, that are operated by Kenny and David Chan. The complaint alleges that from 2012 to 2021 Barco, the Chans and the supplier firms would "knowingly and improperly avoid or decrease the payment of customs duties by undervaluing imported garments" Barco bought from foreign suppliers.
The U.S. said the defendants used a "double-invoicing scheme featuring false entry summaries presented to CBP that undervalued imported goods purchased by Barco." The defendants continued to underpay customs duties despite a third-party auditor advising Barco of the risks of underpayment, the complaint alleged.
The following suppliers were also named in the complaint: Able Allied Limited, Nathan Global Direct, J&K Garment, Mega Goodwill, JS Garment Co. and Superway Import & Export. The complaint lays out three counts of FCA violations and one count of unjust enrichment against all defendants.