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January 30, 2023

International Vitamins Corporation (IVC), which imports and sells vitamins and supplements from China, has agreed to pay $22.8 million to settle claims of defrauding the United States.  The U.S.-based company allegedly avoided U.S. customs duties by misclassifying over 30 of its products, then failed to pay back duties owed after realizing it had underpaid millions of dollars.  The alleged fraud occurred between 2015 and 2019, and only came to scrutiny through a whistleblower’s lawsuit.  USAO SDNY

December 12, 2022

Medical device manufacturer Coloplast will pay $14.5 million to resolve claims that in its contracts with the Department of Veteran’s Affairs the company overcharged the government and submitted false claims.  Coloplast self-disclosed to the government that in violation of the Trade Agreements Act it misreported country of origin and sold products from non-designated countries, and, in violation of applicable Price Reduction Clauses, failed to provide the government with required discounts.  USAO DC

August 11, 2022

Menswear company Luchiano Visconti Loutie LLC d/b/a Luchiano Visconti and its manager Sasha Hourizadeh will pay $3.64 million for violating the False Claims Act by underreporting the value of imported apparel, resulting in over $1.8 million in evaded customs duties. Visconti and Hourizadeh regularly provided falsified invoices to customs brokers that significantly understated the true value of the imported menswear. In some instances, a complicit foreign manufacturer would provide Visconti two sets of invoices—one reflecting itemized pricing details at a reduction, and the second reflecting “services” provided which, when combined, reflected the actual value of the goods. A related whistleblower suit was filed prior to the Government joining the matter. USAO SDNY

August 11, 2022

Industrial battery maker Eos Energy Storage LLC will pay $1.02 million, after a whistleblower filed suit alleging violations of the False Claims Act. From mid-2018 to mid-2019, Eos failed to declare the value of certain components shipped overseas to be assembled and then imported back into the United States. Eos also failed to declare transportation and packing costs on more than 60 occasions, which Eos further acknowledged was their responsibility as importer of record. The whistleblower will receive 20% of the settlement amount. USAO NJ

April 11, 2022

Six California-based companies that conspired with a Chinese billionaire to defraud U.S. Customs and Border Protection and investors worldwide have been ordered to pay $1.83 billion in restitution.  A federal jury found that Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC, Scuderia Development LLC, 1001 Doubleday LLC, Von Karman – Main Street LLC, and 10681 Production Avenue LLC skirted the U.S.’s anti-dumping and countervailing duties (AD/CVD) on certain types of extruded aluminum imported from China by disguising them as functional pallets.  USAO CDCA

January 6, 2022

SoNo International LLC and Ark Capital Equipment LLC have agreed to pay $904,000 to resolve allegations of supplying the Department of Defense with shipping containers that were made in China or made of Chinese steel, in violation of contracts as well as the False Claims Act.  As part of the settlement, the two companies will also submit to enhanced training and reporting requirements pursuant to an administrative agreement with the Defense Logistics Agency.  An unnamed third-party company, which SoNo and Ark hired to change identifying plates on the shipping containers, has separately agreed to train employees on customs rules and regulations.  USAO EDPA

September 10, 2021

Defense contractors Southeastern Equipment Co., Inc. and SECO Parts and Equipment Co. have agreed to pay $900,000 to resolve allegations that they knowingly billed for and provided equipment that was not in compliance with the Buy American Act or the rules of the U.S. Army’s Simplified Nonstandard Acquisition Program.  The government’s investigation was initiated by a the filing of a whistleblower suit under the False Claims Act.  USAO SD Ga

August 18, 2021

Defense contractor Iris Kim, Inc. (“I-Tek”), together with its owner and four employees, were sentenced on criminal charges arising out of a fraudulent scheme to falsely qualify for Department of Defense and other federal government supply contracts set aside for service-disabled veterans, import Chinese-manufactured goods in violation of the terms of these contracts, and falsely relabel these goods as if they were made in the U.S.  The U.S. spent over $7 million on fraudulently-imported goods sold by I-Tek.  Owner Beyung S. Kim was sentenced to 58 months in prison, and the four employees were sentenced to a combined 93 months in prison.  USAO ED VA

July 28, 2021

Clothing companies Stargate Apparel, Inc. (now known as Excel Apparel Corp.), Rivstar Apparel, Inc. (now defunct), and former CEO and owner Joseph Bailey have agreed to pay a total of $6 million to settle a whistleblower’s allegations that they submitted false claims to U.S. Customs and Border Protection (CBP).  Between 2004 and 2015, Stargate, Rivstar, and Bailey allegedly engaged in two different fraud schemes to avoid paying millions of dollars in customs duties.  Both of the schemes involved submitting separate invoices to the CBP, which underreported the true value of goods being imported into the United States.  USAO SDNY
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