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June 6, 2019

Posted  June 6, 2019

Joseph Bailey, the CEO of NYC-based children’s clothing companies Stargate Apparel, Inc. and Rivstar Apparel, Inc., has been arrested, and the government has filed a civil complaint in intervention against all three, arising from their alleged actions in falsifying records regarding the value of goods imported to the U.S. in order to evade customs duty payment obligations.  Defendants allegedly engaged in double-invoicing schemes whereby a Chinese manufacturer would provide both a “pay by” invoice with the actual price, and a second, lower invoice, to be presented to Customs and Border Protection, or a “commercial invoice” and a second “sample invoice” in a larger amount, because sample goods are not subject to customs duties.  The schemes were first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act. USAO SDNY

Tagged in: Criminal Proceedings, Customs Fraud, FCA Federal, Whistleblower Case,