A Texas-based company that imports furniture for university dorm rooms and an affiliated manufacturer have agreed to pay $15 million to settle a whistleblower lawsuit filed by another private company that alleged the defendants misclassified furniture imported from China to U.S. officials when it entered the country, allowing them to avoid paying antidumping fees.
University Furnishings LP and its general partner, Freedom Furniture Group Inc., which collectively did business as University Furnishings, conspired with others to avoid paying the duties on wooden bedroom furniture it brought into the U.S. from the People’s Republic of China, the U.S. Department of Justice said.
In a complaint filed in federal court, University Loft Company alleged the defendants knowingly misclassified and conspired with others to misclassify dorm furniture as office furniture and other types of furniture not subject to the same antidumping fees, which the U.S. imposes to prevent importers from flooding the U.S. market with inexpensive foreign products, hurting U.S. manufacturers.
“Those who introduce goods into the United States must comply with the law, including the payment of customs duties meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, adding that the Justice Department will “zealously pursue” any companies and individuals that scheme their way out of paying the proper import duties.
Federal prosecutors investigated University Loft Furniture’s whistleblower allegations and chose to actively pursue the case. U.S. officials involved in the litigation alleged the scheme started in 2009 and ended in the middle of 2012.
“Companies that cheat, by fraudulently mislabeling their imports, undermine U.S. manufacturers and others that obey the rules, and hurt consumers and taxpayers,” said U.S. Attorney Richard Durbin Jr. of the Western District of Texas, who helped prosecute the case. “We are hopeful that today’s settlement will help deter others from this type of scheme.”
Whistleblowers who file a complaint on behalf of the U.S. are entitled to receive up to 30 percent of any recovery the U.S. government makes as a result of the allegations. University Loft Company will receive an award of $2.25 million as its share of the settlement.
Source: U.S. Department of Justice