3M to Pay $6.5 Million for Foreign Bribery Charges

On Friday (August 25), the Securities and Exchange Commission (SEC) announced that Minnesota-based global manufacturer 3M Company agreed to pay $6.5 million to settle SEC charges of violating the Foreign Corrupt Practices Act (FCPA).  According to the SEC Order finalizing the settlement, the SEC found that employees of 3M's wholly-owned Chinese subsidiary provided improper consideration to Chinese officials of state-owned health care facilities in return for business favor. Specifically, the...

February 7, 2023

Samsung C&T America, Inc., a U.S. subsidiary of the Korean conglomerate Samsung C&T Corporation, has agreed to pay $1 million after admitting that it deliberately misclassified and underpaid customs duties on imported footwear by inaccurately stating their materials and construction.  The violations of the False Claims Act occurred between 2016 and 2018, and involved footwear imported from China and Vietnam.  USAO SDNY

January 31, 2023

New York-based High Life LLC, which designs and imports apparel, has agreed to pay $1.3 million after admitting that it underreported the value of 67 shipments into the United States to avoid paying customs duties.  After multiple shipments were detained for possibly fraudulent declared values, High Life switched from purchasing apparel on Landed Duty Paid (LDP) to Free on Board (FOB), which allowed it to use the price its vendors...

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...

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...

Stericycle Pays More than $84 Million to Settle FCPA Charges

Last Wednesday, Illinois-based waste management company Stericycle Inc. agreed to pay more than $84 million to settle foreign bribery charges brought in parallel by the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and authorities in Brazil. The charges centered around payments Stericycle made to foreign officials in Brazil, Mexico, and Argentina to secure government contracts in those countries.  These types of payments violate the Foreign Corrupt Practices...

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...

Constantine Cannon LLP Announces Three Partnership Promotions

Hamsa Mahendranathan, Sarah “Poppy” Alexander, and Ari Yampolsky join the partnership ranks of the largest and most successful international whistleblower practice in the world NEW YORK, December 8, 2021 –– Constantine Cannon LLP is pleased to announce that it has elevated three attorneys, Hamsa Mahendranathan, Sarah “Poppy” Alexander, and Ari Yampolsky, to partners of the firm. All three attorneys have contributed to the firm’s landmark work representing whistleblowers as they...

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...

Top Ten Tax Recoveries of 2020

Tax fraud and tax evasion, unfortunately, continued apace last year.  Yet even in the face of waning tax resources, enforcement authorities chalked up some key wins in 2020. Criminal recoveries tend to dominate the headlines because many of the biggest tax recoveries are not public: the IRS scrupulously protects taxpayer privacy, and no announcements are made for civil tax recoveries.  Thus only those that result in criminal prosecutions or civil...