Canadian steel companies Farjess and Royal Canadian Steel and their president, Feroz Jessani, agreed to pay $19 million on May 20 to settle allegations that they violated the False Claims Act by evading duties on flat-rolled steel from Europe and Asia.
Perfectus Aluminum and Perfectus Aluminum Acquisitions, along with four affiliated warehousing companies, agreed to pay $549.5 million to settle False Claims Act allegations that they evaded antidumping duty and countervailing duty orders on aluminum extrusions from China.
Importer Echelon Fitness Multimedia agreed to settle claims it violated the False Claims Act by undervaluing fitness equipment imports to lower its tariff obligations, agreeing to pay at least $2.1 million to resolve the allegations, the U.S. Attorney's Office for the Eastern District of Tennessee announced on April 24.
Despite the Supreme Court’s ruling that tariffs imposed under the International Emergency Economic Powers Act are unlawful, DOJ may still pursue False Claims Act cases against companies accused of evading IEEPA tariffs, attorneys said at an April 9 event at the annual Dominick L. DiCarlo U.S. Court of International Trade Lecture.
As DOJ prioritizes trade fraud enforcement under the current administration, it will likely pursue an increasing number of parallel civil and criminal proceedings, Jay McCormack, a partner at Verill and former DOJ attorney, said during a Feb. 26 event hosted by the Massachusetts Export Center during their Export Expo.
DOJ has selected the U.S. Attorney's Office in the Northern District of Illinois to be a "lead prosecutorial partner" on the Trade Fraud Task Force, which was created last year to place a much greater emphasis on trade enforcement. DOJ said insiders with information about trade fraud schemes should consider filing a False Claims Act whistleblower case in the Northern District of Illinois or making a "voluntary disclosure or criminal referral under one of the avenues available for cooperators or whistleblowers."
As CBP increases its use of new technologies to scrutinize importers' supply chains and ensure import compliance, companies will need to respond in kind and ensure that they also have visibility into their supply chains so they can avoid investigations down the road, according to trade experts on a recent webinar hosted by KPMG.
The U.S. declined to prosecute a criminal trade fraud case against global plastic resin distributor MGI International and its subsidiaries Global Plastics and Marco Polo International, DOJ announced on Dec. 18. The agency agreed to credit a $6.8 million payment made by MGI to settle a civil case against the company for knowingly failing to pay customs duties on plastic resin entries from China in its decision not to proceed with a criminal investigation for the same conduct.
Ceratizit USA, a North Carolina-based tungsten carbide distributor, agreed to pay $54.4 million to settle allegations it violated the False Claims Act by "knowingly and improperly failing to pay duties owed on tungsten carbide products" from China, DOJ announced.
DOJ's Trade Fraud Task Force plans to model its tariff enforcement efforts after the DOJ Health Care Fraud Unit's "data-drive playbook to develop leads," DOJ Criminal Division Senior Counsel Cody Herche said at the American Conference Institute's annual anti-corruption conference, according to attorneys at Morgan Lewis. The attorneys said Herche's comment indicates "potential criminal violations of US tariff laws," including the False Claims Act and the statute against smuggling goods into the U.S.