Stargate Apparel, Rivstar Apparel and their former owner and CEO, Joseph Bailey, settled a False Claims Act case with the U.S. Attorney's Office for the Southern District of New York over the companies' use of inaccurate invoices to underreport their clothing imports, the Department of Justice said July 28. Under the settlement, Bailey and the New York-headquartered companies admitted to engaging in the fraudulent schemes. Bailey will pay $3.2 million while the employee stock ownership plan that owns the two companies will pay a combined $2.8 million, DOJ said. Bailey and the companies led two “double invoicing” schemes 2004-2015, according to the complaint.
Steel parts importer Smith-Cooper International settled a False Claims Act allegation raised by Island Industries that the importer evaded antidumping duties, according to a March 29 filing in the U.S. District Court for the Central District of California. In 2017, Island accused SCI of failing to pay antidumping duties on its welded outlet imports from China while also alleging that SCI submitted false information to the U.S. relating to the applicability and amount of duties owed. The initial lawsuit also accused four companies and 11 individuals of violating the FCA due to duty evasion. In the joint motion to dismiss the case, the case was described as having been vigorously litigated. Now a confidential settlement between SCI and Island has been submitted and accepted by the court. Allied Rubber and Gasket Co. was dismissed from the case in August 2020 while litigation continued with the remaining parties.
A California federal judge on March 26 awarded victory to an importer in a False Claims Act lawsuit that alleged it sold improperly sourced goods to the federal government. Judge William Alsup of the U.S. District Court for the Northern District of California found Matthew MacDowell -- the whistleblower with alleged information that the company violated the FCA -- did not have direct knowledge of wrongdoing.
Florida-based construction materials manufacturer Gardner-Gibson agreed to pay a $160,933 settlement to resolve allegations of customs laws violations, the Department of Justice said Jan. 20. Gardner-Gibson, which makes and imports products related to residential and commercial construction, allegedly imported a roofing underlayment product made in China without the proper country of origin labels. An individual brought the charges against Gardner-Gibson under the False Claims Act and said the company knowingly failed to apply country of origin markings on its imports in an effort to evade customs duties. The relator will receive 20% of the $160,933 payment, and Gardner-Gibson will also pay the relator's attorney fees of more than $40,000, DOJ said. “It is important that all U.S. businesses have a fair playing field,” said U.S. Attorney Brian Moran. “This case began with a relator alerting the government to the unlawful conduct, helping the government police the import marketplace to ensure fairness.” The settlement resolves allegations and there was no determination of liability, DOJ said.
Ramped up import enforcement efforts are likely here to stay under President Joe Biden, Sidley Austin's Ted Murphy said in an email. The multi-agency effort to crack down on import violations is expected to continue unencumbered and Murphy views these efforts as not administration-specific, particularly dealing with questions of forced labor, Section 301 tariff evasion and USMCA compliance.
International Trade Today is providing readers with the top stories from Dec. 28-31 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
The owner and CEO of a New York-based apparel company will spend six months in prison for submitting false invoices to CBP as part of a scheme to underpay duties, the Justice Department said in a Dec. 22 news release. Joseph Bailey of Brooklyn, New York, was sentenced by a judge in Southern New York U.S. District Court after having pleaded guilty in January 2020 to wire fraud and entry of falsely valued goods.
International Trade Today is providing readers with the top stories from Dec. 7-11 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Four additional jewelry importers will pay more than $860,000 to settle a whistleblower lawsuit over allegations of misclassification and underpayment of duties, the Department of Justice said in a Dec. 10 news release. Roman & Sunstone, iStar Jewelry, Ansun and Starkes Gems, four related companies based in New Jersey, classified earrings based on the value of pairs or larger groups, instead of the value of single earrings, claiming a lower duty rate than they should have paid had they been correctly classifying the imports, DOJ said.
A former jewelry importer will pay more than $400,000 to settle a False Claims Act whistleblower lawsuit that alleges it intentionally misclassified imported earrings to avoid paying higher customs duties, the Justice Department said in a Dec. 8 news release. A TSI Accessories Group subsidiary allegedly classified the earrings based on the value of pairs or larger groups, when they should have been classified based on the value of each single earring, said the whistleblower complaint, subsequently joined by the Justice Department.