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$4.3 Million Penalty for Undervaluing Imports

Thursday, April 24, 2014
Sandler, Travis & Rosenberg Trade Report

The departments of Justice and Homeland Security announced April 21 that a Colorado corporation has paid $4.3 million to resolve allegations that it violated the False Claims Act and the Tariff Act of 1930 by knowingly underpaying customs duties. The U.S. alleged that for six years the company knowingly omitted the value of assists from the dutiable value declared on entry documents for imported protective cases for smartphones and tablets. The company was also charged with knowingly making or causing to be made false statements on other documents submitted to U.S. Customs and Border Protection concerning the value of the assists and the associated customs duties. The company denied any wrongdoing.

The settlement stems from a lawsuit filed by the company’s former supply chain director pursuant to the qui tam provisions of the FCA. That law provides for such whistleblowers to receive a share of any recovery, which in this case amounts to $830,000.

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