On April 27, 2016, the Department of Justice announced that Z Gallerie LLC, an upscale furniture seller, has agreed to pay $15 million to resolve a False Claims Act suit alleging Customs fraud. The United States alleged that Z Gallerie engaged in a seven-year scheme to evade antidumping duties of imported wooden bedroom furniture from China. Z Gallerie allegedly evaded antidumping duties by intentionally misclassifying the imported furniture as pieces intended for non-bedroom use on documents presented to CBP. For example, Z Gallerie allegedly sold certain Bassett Mirror Company products, including a six-drawer dresser and three-drawer chest, as part of a bedroom collection; however, these goods were misidentified on CBP documents, using descriptions such as “grand chests” and “hall chests,” in order to avoid paying antidumping duties on wooden bedroom furniture.
The False Claims Act contains a qui tam provision that allows whistleblowers to receive a share of the settlement. In this case, Kelly Wells, an e-commerce retailer, collected $2.4 million for providing information that led to the successful settlement agreement. Successful FCA cases serve to keep trade practices fair and can directly benefit the whistleblowers who come forward to aid in this pursuit. This firm has experience with FCA issues and stands ready to help.
Read the press release from the U.S. Department of Justice here.