Manhattan U.S. Attorney Settles Civil Fraud Lawsuit Against Fine Jewelry Designer For Evading Customs Duties
Company Admits to Three Different Evasion Schemes, Must Pay $796,000 and Implement Compliance Measures
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Robert E. Perez, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), and Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today that the United States filed and settled civil fraud claims brought under the False Claims Act against TEMPLE ST. CLAIR LLC (“TEMPLE ST. CLAIR”), a fine jewelry designer, manufacturer, and importer based in New York, New York, with merchandise sold in retail stores and online throughout the United States. As alleged in the Government’s complaint, TEMPLE ST. CLAIR systematically and unlawfully avoided payment of customs duties it owed on goods imported from Thailand, Sri Lanka, and Italy by falsely stating to CBP that the value of the goods was substantially less than the true value, and by senior leadership of TEMPLE ST. CLAIR hand-carrying jewelry into the United States for commercial purposes without declaring it to CBP. Additionally, TEMPLE ST. CLAIR failed to properly affix to jewelry that was manufactured in Sri Lanka and Thailand permanent markings indicating its country of origin, in violation of CBP regulations. As part of the settlement, approved yesterday in Manhattan federal court by U.S. District Judge Katherine Polk Failla, TEMPLE ST. CLAIR admitted to and accepted responsibility for underpaying customs duties and failing to properly mark its merchandise, and agreed to pay $796,000 to the United States and implement corrective measures to prevent future customs violations.
Manhattan U.S. Attorney Geoffrey S. Berman said: “This Office is committed to pursuing customs fraud and holding importers accountable for evading customs duties and disregarding CBP requirements.”
ICE HSI Special Agent-in-Charge Angel M. Melendez said: “Temple St. Clair LLC employed fraudulent schemes that resulted in the underpayment of customs duties and the significant loss of revenue to the U.S. government. Unfair trade practices hurt industries and consumers alike. HSI stands committed with CBP, to vigorously investigate those people and businesses that seek to make a larger profit by circumventing, or even disregarding, customs regulations.”
CBP Director of New York Field Operations Robert E. Perez said: “Today’s settlement is a testament to the dedication of our partners in the United States Attorney's Office, Homeland Security Investigations, and the men and women of CBP in enforcing our nation’s trade laws and taking effective action against those who seek to defraud the government.”
As part of the settlement, TEMPLE ST. CLAIR admitted, acknowledged, and accepted responsibility for engaging in the following conduct:
- From January 2011 through July 2016, TEMPLE ST. CLAIR repeatedly understated the actual value of jewelry it imported from Italy, Sri Lanka, and Thailand in documents presented to CBP to establish the import duties owed on the jewelry.
- From January 2011 through July 2016, to obtain duty-free treatment pursuant to the Generalized System of Preferences trade-preference program, TEMPLE ST. CLAIR misrepresented to the United States that at least 35% of the value of jewelry was added in Sri Lanka or Thailand.
- In 2017, TEMPLE ST. CLAIR failed to ensure that the jewelry it was importing from Sri Lanka and Thailand was permanently marked with its country of origin at the time of entry.
- Between 2011 and 2016, TEMPLE ST. CLAIR senior management brought jewelry into the country for commercial purposes, and improperly failed to declare those items to CBP. As a result, TEMPLE ST. CLAIR improperly avoided paying import duties for those items.
The settlement also requires TEMPLE ST. CLAIR to implement procedures to properly mark its jewelry with the country of origin. TEMPLE ST. CLAIR must affix markings to the jewelry prior to the time of importation and with sufficient permanence to withstand normal shipping and handling.
The allegations of fraud stated in the Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act.
Mr. Berman praised the investigative work of HSI on this case. He also thanked CBP for its assistance.
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Kirti Vaidya Reddy and Peter Aronoff are in charge of the case.