Whistleblower importers revealing custom tariff evasion by filing cases against employer or competitor under the False Claims Act

Business that are active in importing goods for sale in the United States are revealing their competitor’s fraud in cheating on customs tariffs and collecting upto 30% of what the government recovers from their claims.  Filing a claim under the False Claims Act  stops cheating competitor from fudging on tariffs and allows for a significant bounty  for reporting this fraud to the federal government. L Toyo Ink SC Holdings Co. Ltd. (“Toyo”), a l Japanese manufacturer of printing inks with affiliates in New Jersey and Illinois, agreed to pay $45 million to settle claims of tariff evasion brought under the False Claims Act. The suit alleged that Toyo was deliberating evading paying required duties on imports by knowingly misrepresenting the country of origin for a particular colorant product. While Toyo represented the country of origin for the colorant to be Japan and Mexico, the colorant was actually imported from China and India and undergoing a superficial finishing process in Japan and Mexico.

The Department of Justice is aware of an increase in customs fraud  including such  illegal conduct such as mislabeling products to conceal their true country of origin, removal of required labeling prior to delivery of products out of the country, undervaluing products to avoid paying import duties and other forms of tariff evasion.

 

The government settled a $6.3 million case under the False Claims Act brought by a former sales account manager for a Chinese-owned logistics and warehousing company, CMAI. CMAI imports automotive parts which are distributed to Ford, General Motors and Chrysler. CMAI paid $6.3 million to resolve charges that the company evaded customs duties on the imported automotive parts.

A Hong-Kong based jewelry manufacturer with New York affiliates, Noble Jewelry Ltd., paid the U.S. government $3.85 million to resolve charges that it was submitting false invoices on shipments and under reporting the value of the items shipped. The allegations were first brought to the government’s attention in a complaint filed by a whistleblower under the False Claims Act.

Jeffrey Newman represents whistleblowers in  customs fraud cases.