Importers to Pay More Than $860,000 to Resolve False Claims Act Allegations Concerning Unpaid Customs Duties on Chinese Earrings
BOSTON – Four jewelry importers have agreed to pay more than $860,000 to resolve allegations that they failed to pay customs duties on sterling silver earring imports from China.
The importers, Roman & Sunstone LLC; ISTAR Jewelry LLC; Ansun Inc.; and Starkes Gems Inc., are affiliated companies headquartered in New Jersey, and will pay $866,068 to resolve False Claims Act allegations.
Under customs laws, duties on sterling silver earrings imported from China vary based on the value of the jewelry - the more expensive the earrings, the lower the duty rate. An earring’s value is calculated per earring (rather than each pair of earrings or collection of earrings).
Between 2015 and 2018, Roman & Sunstone and its affiliates imported display cards of sterling silver earrings from China for resale at department stores. The display cards often included multiple pairs of earrings. The government contends that Roman & Sunstone and its affiliates improperly concealed the number and value of these imports from U.S. Customs and Border Protection by describing on import records the number of display cards imported, rather than the number of individual earrings. These importers’ misstatements increased the declared value of the imports, allowing them to pay a lower duty than they should have based on the value of each earring. The government contends that Roman & Sunstone and its affiliates knew they were underpaying duties but continued to use misleading import records in order to avoid their obligations to pay customs duties.
The U.S. Attorney’s Office recently reached a $402,637 settlement with a former importer, TSI Accessories Group, Inc., concerning related conduct.
This civil settlement arose from a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. In connection with today’s settlement, the whistleblower will receive approximately $152,000 of the recovery.
United States Attorney Andrew E. Lelling; Michael S. Denning, Director, Boston Field Office, U.S. Customs and Border Protection; and David Magdycz, Acting Special Agent in Charge, Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Brian M. LaMacchia of Lelling’s Affirmative Civil Enforcement Unit handled the matter.