Importers Global Plastics and Marco Polo International agreed to pay $6.8 million to settle claims that they violated the False Claims Act by knowingly failing to pay customs duties on plastic resin from China, DOJ announced. The U.S. said Global Plastics and Marco Polo, both subsidiaries of MGI International, received credit for "cooperating with the government."
Importer Grosfillex agreed to pay $4.9 million to settle claims that it violated the False Claims Act by evading antidumping and countervailing duties on items made with aluminum extrusions from China, DOJ announced. The FCA case was initially filed by Edward Wisner, a former employee of Grosfillex and whistleblower in the case, who will receive a $962,662.74 cut of the settlement.
The U.S. filed a complaint on July 15 in a case against importer Global Office Furniture and its owner Malcom Smith for allegedly violating the False Claims Act by knowingly underpaying duties on imported office chairs, the U.S. Attorney's Office for the District of South Carolina announced. The case was originally filed in March 2020 by Sharon Joyce, former office manager for Global Office Furniture (United States v. Global Office Furniture, D.S.C. # 2:20-01223).
DOJ's criminal division has identified trade fraud as a top priority, assigning its market integrity and major frauds unit to handle tariff evasion cases, a DOJ official confirmed to us. The official said that the major frauds unit is shifting resources to trade and looking to cases involving "long-running frauds, senior executives, and large volumes of alleged losses from unlawful tariff evasion schemes."
The U.S. Court of Appeals for the 9th Circuit's recent ruling in a trade-related False Claims Act case likely will create more customs fraud enforcement led by private parties and should lead importers to be extra wary that they are complying with U.S. trade laws, various laws firms said. The case is Island Industries v. Sigma Corp. (9th Cir. # 22-55063).
The U.S. Court of Appeals for the 9th Circuit on June 23 upheld a jury's determination that importer Sigma Corp. is liable under the False Claims Act for lying about whether its imports were subject to antidumping duties. Judges Michelle Friedland and Mark Bennett said no errors of law were made against Sigma and that the federal district court, not the Court of International Trade, had jurisdiction in the case (Island Industries v. Sigma Corp., 9th Cir. # 22-55063).
DOJ is revising its corporate enforcement policy to encourage more voluntary disclosures, including by outlining a clearer path for self-reporting companies to avoid criminal prosecutions, the agency said. It’s also adding trade and sanctions to the list of “priority areas” for its whistleblower awards program.
Jerrob Duffy, former head of DOJ's litigation unit in the criminal fraud section, has joined Hogan Lovells as a partner in the investigations, white collar and fraud practice, the firm announced. Duffy joins from Squire Patton, and his practice includes sanctions violations, Foreign Corrupt Practices Act proceedings and the False Claims Act investigations, Hogan Lovells said.
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.
California-based importer Evolutions Flooring and its owners, Mengya Lin and Jin Qian, agreed to settle claims they violated the False Claims Act by "knowingly and improperly evading customs duties" on multilayered wood flooring from China, DOJ announced. DOJ said the company and its owners will pay $8.1 million to settle the case, noting that whistleblower Urban Global will receive around $1.2 million of the proceeds.