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Whistleblower Awarded For Exposing Customs Duties Fraud

whistleblower 3 370x210 Whistleblower Awarded For Exposing Customs Duties FraudTwo individuals who devised a scheme to slip Chinese imports through customs without paying duties on them will pay the U.S. $435,000 to settle the allegations of fraud stemming from a whistleblower lawsuit filed under the False Claims Act.

Robert Wingfield, a Texas resident, agreed to pay $385,000 of the settlement and Bill Ma of New Jersey agreed to pay $50,000 to settle a case stemming from a lawsuit filed by James Valenti, Jr. under the whistleblower provision of the False Claims Act.

According to the U.S. Justice Department, Mr. Wingfield and Mr. Ma devised a scheme to import aluminum extrusions – parts used for manufacturing shower doors and other enclosures – from China without paying anti-dumping and countervailing duties.

The U.S. imposes those duties on certain imports to level the playing field for domestic products and manufacturers and prevent foreign companies from “dumping” their products into the U.S. market at prices below cost.

The complaint alleged that Mr. Wingfield, who was the U.S. sales representative for Tai Shan Golden Gain Aluminum Products, the Chinese company that exported the aluminum extrusions, conspired with domestic importers to submit false information to the U.S. government to evade duties.

To facilitate this customs duties fraud scheme, Mr. Ma formed Northeastern Aluminum Corp. (Northeastern), to act as the importer of record for the goods in an attempt to shield the real importers from liability.  The complaint asserts that Mr. Ma misrepresented the country of origin of the goods as Malaysia, when the goods were actually manufactured in China and merely shipped through Malaysia, a country not subject to the same customs duties.

The settlement is one part of broader litigation stemming from Mr. Valenti’s lawsuit. The U.S. government previously settled with four other importers implicated in the scheme, and the settlements with Mr. Wingfield and Mr. Ma bring the total amount recovered to more than $4.58 million.

Mr. Wingfield also pleaded guilty to one count of using false statements to import goods into the United States.

“The nation’s customs laws are designed to protect domestic manufacturers from unfair competition abroad,” said Benjamin Mizer, head of the Justice Department’s Civil Division. “These settlements show that the Department of Justice is committed to pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including individuals who make such evasion possible by the businesses that import the goods.”

Mr. Valenti will receive about $79,000 as his share of the settlement arising from his whistleblower complaint. Mr. Valenti also received a share of other recoveries resulting from his lawsuit, including an award of more than $555,000 in February.

Sources:

U.S. Department of Justice
Righting Injustice