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$435,000 Penalty to Settle False Claims Act Suit Alleging AD Duty Evasion

Wednesday, September 09, 2015
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Sept. 4 that two men have agreed to pay $385,000 and $50,000, respectively, to resolve a lawsuit brought under the False Claims Act alleging that they engaged in a scheme to evade antidumping duties on aluminum extrusions from China. The DOJ has previously settled with four other importers allegedly implicated in this scheme, and the most recent settlements bring the total penalties to more than $4.58 million. 

The complaint alleged that one of the men, the U.S. sales representative for the Chinese company that exported the goods at issue, conspired with domestic importers to submit false information to the government to evade duties. The complaint further alleged that the other man later formed a company to act as the importer of record for the goods in an attempt to shield the real importers from liability. That company allegedly misrepresented the country of origin of the goods as Malaysia when the goods were actually manufactured in China and transshipped through Malaysia, which is not subject to the U.S. AD duty order on aluminum extrusions.

The allegations resolved by these settlements were originally brought by a whistleblower under the qui tam provisions of the FCA, which permits private parties to sue on behalf of the government those who avoid paying funds owed to the government or cause or conspire in such conduct. The U.S. may intervene in and take over such a lawsuit, as it did in this case. The FCA allows the whistleblower to receive a share of any funds recovered through the lawsuit, which in this case will be approximately $79,000.

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