Centric Parts – Customs Fraud ($8 million)
In a
customs fraud victory, the Constantine Cannon team represented whistleblower
Steve Hughes in his successful
False Claims Act action against his former employer, auto parts distributor
CWD, LLC. Hughes alleged that CWD, which does business as
Centric Parts, misclassified brake pads imported from Asia as “unmounted” brake pads when they were, in fact, brake pads mounted to a metal backing plate, and therefor subject to a 2.5% tariff. When Hughes learned of the misclassification, he immediately advised the CEO and CFO to disclose the issue to U.S. Customs and Border Protection. Instead, the company concealed the misclassification and retaliated against Hughes. As a result of Centric’s alleged omissions and false statements regarding its imported products, the company knowingly evaded millions of dollars of customs duties it owed to the United States. The
$8 million settlement resolved the Hughes lawsuit and one other
qui tam action filed by a different whistleblower. The whistleblowers shared a
$1.48 million whistleblower award, representing 18.5% of the government’s recovery.
Whistleblower Insider;
Press release