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Importer Pays $1.2 Million to Settle False Claims Act Charges on Underpaid Duties

Tuesday, March 25, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Justice reports that an importer of computer cable assemblies located in California has paid $1.2 million to settle allegations that it violated the False Claims Act by underpaying customs duties owed on goods imported from China. The company was charged with obtaining two sets of invoices for each shipment from the Chinese factory: one true invoice that it paid and a second invoice falsely stating a lower cost that was allegedly used to calculate the import duties the company paid.

A DOJ press release notes that this settlement resolves a whistleblower lawsuit filed by a former manager with the company under the qui tam provisions of the FCA, under which private citizens may file lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment. In this case, the former manager will receive $252,000.

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