Whistleblower gets $1.9 mill. of $25.5 mill. settlement for revealing customs fraud on imported furniture from China




Furniture merchant, turned whistleblower Kelly Renee Wells of Alabama, will receive nearly two million dollars for revealing revealed that larger retailers were evading import tariffs on furniture made in China by misclassifying the bedroom furniture as living room or hall furniture in order to evade “dumping” duties. One of the companies she sued, Bassett Mirrors, Inc.  just settled the claims against it for $10.5 Million. Last year, its co-defendant Z Gallerie of California settled its case for $15 million. Federal prosecutors intervened in the cases against Bassett and Z Gallerie but have not intervened in the two co-defendants left, Neiman Marcus and Macy’s. Ms. Wells was the source of information for both companies that settled.

Ms. Wells Attorney, Page Pate, says that he intends on pursuing Macy’s on his own for whistleblower Wells. The duties imposed by the U.S. Commerce Department are designed to protect domestic manufacturers from Chinese manufacturers who were dumping wooden bedroom furniture into the U.S. market. The case is part of a much larger picture involving extensive tariff evasion concerning Chinese goods including the dumping of honey some of this is adulterated by sweeteners and antibiotics not approved by the FDA. Thousands of barrels of fake honey is being transshipped from China through Taiwan and other countries with false documents in order to evade dumping duties.

The Department of Justice stated in its announcement of the settlement against Z Gallerie in April 2016 that it resolved allegations that Z Gallerie evaded antidumping duties on wood bedroom furniture imported from China from 2007-1014 by misclassifying or conspiring with others to misclassify the imported furniture as pieces intended for non-bedroom use on documents presented to Customs and Border Protection.

If the case against Macy’s is successful, the whistleblower, Ms. Wells could receive additional moneys for revealing the customs evasions of the company.

Jeffrey Newman represents whistleblowers but not in this case.