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September 10, 2018

Michael Brian Anderson, a shrimper and fisherman, has been sentenced to 77 months in prison for defrauding Customs & Border Protection (CBP), after earlier being convicted of false statements, mail fraud, and money laundering. Under the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), federal subsidies are made available to American shrimpers to offset revenue lost to competitors in the global marketplace. As a domestic shrimper, Anderson was eligible to apply for the subsidies but fraudulently inflated his expenses to more than $24 million for a two year period. He then received $800,00 in subsidies, which he used to purchase boats, real estate, and stocks. In addition to his prison sentence, he is now due to pay restitution to CBP for $818,234. USAO SDGA

Tagged in: Customs Fraud, Financial and Investment Fraud,

September 6, 2018

The owner of New Jersey-based defense contracting firm, Bright Machinery Manufacturing Group Inc (BMM), has been charged with defrauding the Department of Defense and violating the Arms Export Control Act. From 2010 to 2015, Ferdi Gul—currently at large in Turkey—submitted bids and was awarded 346 contracts worth $7 million to manufacture military parts within the U.S., including torpedoes, firearms, and mine clearance systems. Instead, Gul had the parts made in Turkey, submitted false quality control paperwork, and sent the parts back to the U.S. to DoD customers. In subsequent testing by the DoD, some of the parts were shown to be essentially unusable. If found and convicted, Gul could be imprisoned for a maximum of 160 years and be ordered to pay up to $3.5 million. USAO NJ

Tagged in: Defense Contract Fraud, Government Procurement Fraud, Trade Agreements,

August 8, 2018

The former CEO of Wellco Enterprises, Inc., Vincent Lee Ferguson, was sentenced to 41 months in federal prison for his role in a scheme to sell boots to the Department of the Defense and others as "Made in the U.S.A.," when the boots were, in fact, made in China.  The company instructed its Chinese manufacturing facility to include tear-away "Made in China" labels on the boot uppers, and then instructed employees at Wellco's New Jersey facility to remove the labels.  The company sold over $8 million in fraudulently-marked boots.  USAO E.D.Tenn.

Tagged in: Defense Contract Fraud, Government Procurement Fraud, Trade Agreements,

June 27, 2018

The government settled fraud charges under the False Claims Act against Temple St. Clair LLC for allegations of systematically avoiding payment of customs duties on goods it imported from various countries including Thailand, Sri Lanka, and Italy. Temple St. Clair allegedly perpetuated the fraud by claiming the good it imported were of a lower value than the true value. Other Temple St. Clair employees also allegedly hand-carried jewelry into the United states without declaring it to Customs and Border Patrol. Temple St. Clair agreed to pay $796,000 to resolve the allegations and institute a number of changes to its practices. USAO SDNY

Tagged in: Customs Fraud, FCA Federal,

June 8, 2018

New Jersey couple Babu Metgud and Shubhada Kalyani, who operated defense contractor Shubhada Industries, were ordered to pay more than $232,000 for overcharging the Defense Logistics Agency for, and failing to disclose the origin of, munition vehicle light assemblies it had acquired from third parties and marked up by 5,400%. The case was decided on the government’s summary judgement motion. USAO EDPA

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

February 13, 2018

British Knitwear Retailer Pure Collection Ltd. and its CEO Samantha Harrison agreed to pay $908,100 to resolve allegations they violated the False Claims Act by avoiding U.S. customs duties owed on merchandise shipped from the United Kingdom to U.S. customers, including many customers in Maine. According to the government, they did so by breaking up single shipments into multiple shipments of lesser value in order to avoid the applicable duties. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Andrew Patrick. He will receive a yet-to-be determined award from the proceeds of the government’s recovery. DOJ (D. ME)

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

February 6, 2018

Tennessee-based Home Furnishings Resource Group Inc. (which also operates under the name Function Furniture First) agreed to pay $500,000 to resolve allegations it violated the False Claims Act by making false statements on customs declarations to avoid paying antidumping duties on wooden bedroom furniture imported from China. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Home Furnishings competitor University Loft Company. University Loft will receive a whistleblower award of roughly $75,000 from the proceeds of the government's recovery. DOJ

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

January 16, 2018

Virginia-based home furnishings company Bassett Mirror Company agreed to pay $10.5 million to resolve allegations it violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying antidumping duties on wooden bedroom furniture imported from China. According to the government, Bassett Mirror evaded antidumping duties owed on wooden bedroom furniture imported from China by misclassifying the furniture as non-bedroom furniture which at the time of the alleged conduct was not subject to an antidumping duty. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Kelly Wells, an Alabama merchant who sells furniture on line. Ms. Wells will receive a whistleblower award of roughly $1.9 million from the proceeds of the government's recovery. DOJ

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

January 11, 2018

Textile importer American Dawn, Inc. and its executives Habib Rawjee, Mahmud Rawjee, and Adnan Rawjee, agreed to pay roughly $2.3 million to resolve allegations of violating the False Claims Act by intentionally misclassifying certain textiles such as bath and shop towels imported into the United States in order to pay lower tariff rates. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former employee of American Dawn. The whistleblower will receive an award of roughly $400,000 from the proceeds of the government's recovery. DOJ (NDGA)

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

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