Alot. Here is just one example of a company that paid $22.2 Million to settle its False Claims Act case:
Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”) have agreed to pay the United States more than $22.2 million to resolve allegations that Linde violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying duties owed on the companies’ imports, the Justice Department announced. Linde GmbH is a multinational corporation headquartered in Germany that, among other things, imports materials into the United States for use in the construction of natural gas and chemical manufacturing plants. Houston-based LENA managed procurement and logistics for Linde, which imported more than $500 million in goods into the United States between 2011 and 2017.
To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are covered by antidumping or countervailing duties, and the amount of duties owed. U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed. It is the importer’s affirmative duty to use “reasonable care” to make sure that such information is accurate so that CBP can assess the proper duties.
The United States alleged that, between 2011 and 2017, Linde avoided duties owed to the United States, including in some instances antidumping and countervailing duties, by misrepresenting the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.
Prior to the United States’ disclosure to Linde of its investigation, Linde made a partial disclosure to CBP regarding its importing practices. In the settlement, the United States acknowledged Linde’s cooperation.
The settlement with Linde resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.
The Department of Justice has brought enforcement actions against parties who have sought to evade payment of duties. For example, importers who attempt to conceal the true country of origin of merchandise (e.g., through mislabeling) may face civil liability under the Tariff Act of 1930, as well as criminal liability under a range of statutes, such as 18 U.S.C. § 541 (Entry of goods falsely classified); 18 U.S.C. § 542 (Entry of goods by means of false statements); 18 U.S.C. § 545 (Smuggling goods into the United States); and more traditional criminal laws (such as conspiracy or wire/mail fraud statutes).
The False Claims Act imposes civil liability on any person who knowingly presents a false claim for payment of government funds or makes a false statement that is material to a claim for payment of government funds. The statute also enables whistleblowers (or “relators”) to file qui tam actions on behalf of the government and receive a share of any money recovered in the litigation.
The DOJ is expected to investigate companies that engage in fraudulent customs declarations, including:
- Misclassification of Goods—Businesses misrepresented imported product categories to pay lower tariffs.
- Undervaluation Schemes—Importers declared lower values for goods to reduce tax obligations.
- Antidumping and Countervailing Duty Evasion—Several settlements involved companies falsely claiming that products originated in compliant countries, while concealing their actual manufacturing origin (e.g., China, India).
Jeff Newman JD MBA, represents whistleblowers nationwide relating to customs and tariff fraud concerning imported Chinese goods as well as corporate whistleblowers in major claims under the False Claims Act (Qui Tam), and SEC, IRS and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
