January 19, 2018 - Posts

Three Recent Settlements for Customs Duty Fraud

A reminder that the False Claims Act covers much than just Medicare, Medicaid, and Defense Contracting


There is no question that healthcare fraud—i.e. fraud against Medicare, Medicaid, and related federal healthcare systems—is the single biggest category of fraud against the government, with defense contracting fraud a somewhat distant second.  In fact, based on data from the Department of Justice, $2.4 billion of the $3.7 billion recovered in 2017 under the federal False Claims Act involved the health care industry.


Given how big a role Medicare and Medicaid fraud play in the world of the False Claims Act, it is sometimes easy to forget all the other ways that companies try to defraud the federal government and, ultimately, the American taxpayer.  For example, over the past few months there have been at least three different False Claims Act settlements by companies accused of deliberately avoiding customs duties and tariffs for their imported goods:  a $10.5 million dollar settlement from furniture company Bassett Mirror Company; a $2,338,879 settlement from textile importer American Dawn, Inc.; and a $1 million settlement from garment wholesaler Notations, Inc. The Notations settlement is particularly interesting, as the Defendant was not an importer, but a wholesale retailer accused of turning a blind eye and financially benefitting from the fraudulent actions of its business partners.  All three settlements resulted from False Claims Act whistleblower lawsuits.


It is not clear whether these three settlements represent any broader trend of increased tariff enforcement using the federal False Claims Act.  But it is a reminder that fraud against the government comes in many different forms, and is not limited to the worlds of healthcare and defense.


To learn more about our Whistleblower & Qui Tam practice click here.  Our firm is located in Nashville, Tennessee but we represent whistleblowers all around the country.

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