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PENTAX CORPORATION AGREES TO PAY $20 MILLION

WASHINGTON, D.C. -- Denver-based Pentax Corporation, its parent corporation, and one of its affiliates, have agreed to pay $20 million to resolve claims that Pentax imported $60 million worth of camera equipment bearing false country of origin markings, the Department of Justice announced today. This penalty is one of the largest ever paid by an importer under United States Customs' statutes.

David W. Ogden, Acting Assistant Attorney General for the Civil Division, said the settlement resolves claims against Pentax Corporation, its parent Asahi Optical Co., Ltd., of Japan, and Asahi Optical (International), Ltd., of Hong Kong. The U.S. alleges that from July 1987 through March 1991, Pentax imported camera equipment into the U.S. from the Peoples Republic of China, but intentionally labeled the equipment as having been assembled in Hong Kong. As a matter of law, all foreign made merchandise entering the U.S. must bear markings stating the country of origin.

The government also alleged that the defendants intentionally misled Customs' auditors and investigators when they sought to investigate the mismarked importations. The U.S. alleged that the defendants' top executives ordered the destruction of documents as part of a plan to mislead Customs' investigators.

The settlement agreement resolves a dispute as to how the falsely marked camera equipment was imported into the U.S., and whether the defendants properly cooperated with Customs' officials when the false markings were discovered in 1991. The defendants contended that they unintentionally imported the mismarked goods. They also contended that they disclosed the existence of the mismarked goods to the government and cooperated with the government's investigation, thus entitling the defendants to reduced penalties. The government contended that defendants intentionally imported the camera equipment into the U.S. bearing false country of origin markings and then intentionally mislead Customs' investigators as to the circumstances that led to the false country-of-origin markings.

"These companies deprived American citizens of their right to know the origin of the goods they buy," said Ogden. "The Department will continue to pursue claims against corporations that violate United States Customs' laws."

The false country-of-origin designation on the $60 million worth of camera equipment did not directly affect the amount of duties Pentax paid when importing the camera equipment. The $20 million penalty is believed to be the largest Customs penalty ever paid in an instance where the defendants' misconduct did not directly affect Customs' revenues.

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