Two Individuals Agree to Pay $435,000 to Settle False Claims Act Suit Alleging Evaded Customs Duties
The Department of Justice announced today that Robert Wingfield, of Texas, and Bill Ma, of New Jersey, have agreed to pay $385,000 and $50,000, respectively, to resolve a lawsuit brought by the United States under the False Claims Act alleging that they engaged in a scheme to evade customs duties on imports of aluminum extrusions from the People’s Republic of China (PRC).
“The nation’s customs laws are designed to protect domestic manufacturers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “These settlements show that the Department of Justice is committed to pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including individuals who make such evasion possible by the businesses that import the goods.”
The Department of Commerce assesses, and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects, antidumping and countervailing duties to protect U.S. businesses and level the playing field for domestic products. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. Imports of PRC-manufactured aluminum extrusions have been subject to antidumping and countervailing duties since 2010. Aluminum extrusions are used, among other things, to make shower doors and enclosures.
Wingfield was the U.S. sales representative for Tai Shan Golden Gain Aluminum Products Ltd., the Chinese company that exported the aluminum extrusions in this case. The complaint alleged that Wingfield conspired with domestic importers to submit false information to the government to evade duties, and that Ma later formed a company, Northeastern Aluminum Corp. (Northeastern), to act as the importer of record for the goods in an attempt to shield the real importers from liability. As the ostensible importer of record, Northeastern, through Ma, allegedly misrepresented the country of origin of the goods as Malaysia, when the goods were actually manufactured in the PRC and merely shipped through Malaysia, a country without duties on such items. This practice is called transshipping.
The United States previously settled with four other importers allegedly implicated in the scheme. Today’s settlements bring the total to more than $4.58 million. For previous settlement press releases in this case, click here and here. In addition, Wingfield pleaded guilty to one count of using false statements to import goods into the United States.
“When businesses and individuals fraudulently evade import duties designed to foster fair competition, consumers lose,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “We will hold accountable those involved in illegal schemes that place businesses in our district at an unfair disadvantage.”
“Antidumping and countervailing duties are critical to ensure fair competition for U.S. manufacturers,” said Commissioner R. Gil Kerlikowske of the CBP. “U.S. Customs and Border Protection works diligently with the Department of Justice, U.S. Immigration and Customs Enforcement, Homeland Security Investigations and the U.S. Department of Commerce to aggressively pursue duty evasion.”
The allegations resolved by the settlements announced today were originally brought by whistleblower James F. Valenti Jr. in the U.S. District Court for the Middle District of Florida under the qui tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the government those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The United States may intervene in and take over the lawsuit, as it did in this case. The act allows the whistleblower to receive a share of any funds recovered through the lawsuit. Mr. Valenti will receive approximately $79,000 as his share of today’s settlements.
The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Middle District of Florida, CBP, U.S. Immigration and Customs Enforcement and the Department of Commerce’s International Trade Administration.
The lawsuit is captioned United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products Ltd., et al., Case No. 11-cv-368 (M.D. Fla.). The claims resolved by these settlements are allegations only; there have been no determinations of liability.