The Department of Justice reports that a German company and its U.S. subsidiary will pay $1.9 million to settle allegations of customs fraud under the False Claims Act.

According to a press release from the U.S. Attorney’s Office for the Northern District of Georgia, this case began when a competitor filed a whistleblower complaint alleging that the company was manufacturing cutting tools in a Chinese factory. The tools were shipped to Germany, where some additional processing was performed on some of them, and then shipped to the U.S. and declared to be “made in Germany.” The press release notes that if the products had been correctly described as of Chinese origin they would have been subject to a 25 percent tariff.

The FCA imposes civil liability on any person who submits false claims to the federal government or its contractors. It imposes treble damages and civil penalties and allows whistleblowers who bring fraud to the government’s attention to share in any recovery.

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