Archive

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

Tagged in: Contract Non-Compliance, Defense Contract Fraud, FCA Federal, Government Procurement Fraud, Trade Agreements, Whistleblower Case,

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

Tagged in: Criminal Proceedings, Defense Contract Fraud, Government Procurement Fraud, Set-Asides and Preferences, Trade Agreements,

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

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

January 11, 2021

Defense contractor Raytheon Technologies Corporation and its subsidiary, Hamilton Sundstrand Corporation, have agreed to pay over $515,000 to settle allegations of submitting false claims for payment. Between 2006 and 2015, Raytheon and Hamilton improperly certified that goods it sold either directly to the government or to suppliers selling to the government were of domestic origin, when in fact they were manufactured in Romania. The false certifications violated the contracts’ domestic-preference requirements, the Buy American Act of 1933, and the False Claims Act. USAO CT

Tagged in: Certifications, Defense Contract Fraud, FCA Federal, Government Procurement Fraud, Trade Agreements,

December 16, 2020

Handicare USA, which manufactures and installs patient lift and mobility systems for healthcare facilities, agreed to pay $800,000 to resolve claims that it knowingly provided products to the Veterans Administration that failed to comply with the Trade Agreements Act. A whistleblower tipped the government that Handicare patient lifts installed at VA facilities used parts made in China for the mounting system that secured the patient lift to the ceiling, and took steps to conceal its non-compliance, including by instructing that the products should be installed so that the “Made in China” stamps on metal parts would not be visible. USAO DC

Tagged in: Government Procurement Fraud, Healthcare Fraud, Medical Devices and DME, Trade Agreements,

December 10, 2020

Four affiliated jewelry importing companies – Roman & Sunstone LLC; ISTAR Jewelry LLC; Ansun Inc.; and Starkes Gems Inc. – agreed to pay $866,068 to resolve claims made in an action brought by a whistleblower under the False Claims Act that they evaded customs on earrings imported from China by misrepresenting the quantity imported. The whistleblower will receive an award of approximately $152,000. USAO MA

Tagged in: Customs Fraud, FCA Federal, Whistleblower Case, Whistleblower Rewards,

October 30, 2020

Days and Towers, LLC will pay over $800,000 to resolve charges that it violated the False Claims Act between 2015 and 2019 through its submission of false tariff schedules to reduce its customs obligations on imported products. USAO PR

Tagged in: Customs Fraud, FCA Federal,

September 25, 2020

A multinational industrial engineering company headquartered in Germany has agreed to pay $22 million to settle allegations of violating the False Claims Act. In order to avoid paying certain import duties over a six year period, Linde GmbH and its Houston-based subsidiary, Linde Engineering North America LLC knowingly misrepresented the nature, classification, and valuation of its merchandise, which is used in the construction of natural gas and chemical manufacturing plants. The misconduct was first brought to the government’s attention by a whistleblower, who will receive a $3.7 million share of the settlement proceeds. The defendant later made a partial disclosure to the government prior to the government’s disclosure of its investigation. DOJ; USAO EDPA

Tagged in: Customs Fraud, FCA Federal, Misrepresentations, Whistleblower Case, Whistleblower Rewards,

August 26, 2020

LA-based clothing company Ambiance Apparel and its owner Sang Bum “Ed” Noh have pleaded guilty to customs violations and tax offenses, agreeing to pay a total of $118 million, which includes $36 million in previously-seized cash. Defendants evaded import tariffs by colluding with Asian manufacturers for the submission of invoices to CBP that fraudulently understated the value of imported clothing. The fraudulent invoices indicated payment terms by letter of credit; a second invoice for the balance of the actual price was paid by defendants by wire transfer. In less than five years, Ambiance undervalued imports by about $82.6 million and failed to pay more than $17.1 million in tariffs. In addition, defendants failed to properly report cash transactions and maintained a second set of books for cash transactions, evading nearly $17 million in taxes. The company will be placed on probation for five years and will be ordered to undertake specific compliance procedures. USAO CD Cal

Tagged in: Criminal Proceedings, Customs Fraud, Financial and Investment Fraud, Tax Fraud,

July 22, 2020

Auto parts distributor CWD Holdings LLC, which does business as Centric Parts, will pay $8 million to resolve claims in False Claims Act cases brought by two whistleblowers, Steven Hughes and Jeffrey Hawk. The government alleged that over the course of ten years the defendant imported brake pads, falsely identifying them as unmounted brake pads, which are not subject to any tariff, when they were, in fact, mounted brake pads, which are subject to a 2.5% tariff. Defendant thereby knowingly evaded millions of dollars in customs duties. The whistleblowers will share a $1.48 million whistleblower award. USAO ED MI; USAO CD CA

Tagged in: Customs Fraud, FCA Federal, Government Programs Fraud, Whistleblower Case, Whistleblower Rewards,

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