Dallas Importer to Pay $2.5 Million to Settle FCA Case on Avoided Customs Duties
Dallas-based importer ADCO Industries, also known as Dallco Marketing, settled charges that it violated the False Claims Act by avoiding customs duties on Chinese industrial product imports, the U.S. Attorney's Office for the Northern District of Texas announced. The company agreed to pay $2.5 million to settle the whistleblower action, with $500,000 going to whistleblowers Donald Reznicek and Collen McFarland.
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At the time the complaint was filed in February 2022, Reznicek was ADCO's manager of logistics and billing, and McFarland was the importer's bookkeeper. The pair alleged that beginning in 2019 the company and its suppliers used fraudulent invoicing methods to undervalue imports of goods such as dollies, shelves and safety cutters from China. Suppliers created two sets of invoices, one for the company to pay the Chinese suppliers a reduced amount that would be reported to customs, the other billing for "legitimate services" but in reality for the remaining costs of the goods, the complaint said.
“Customs laws are an important component of national security and, among other things, protect the public and American businesses from unfair competition,” U.S. Attorney Leigha Simonton said. “This office will continue to aggressively investigate and hold accountable anyone it believes has tried to cheat the government and the public at large through the manipulation of customs duties.”