Monday, February 16, 2015

$3 Million Settlement Reached in Shower Door Transshipment Case

Several news outlets reported that a settlement has been reached in the Department of Justice’s lawsuit against companies that allegedly were involved in an effort to evade duties on aluminum extrusions.

The Yuma News reported that “The Department of Justice announced last week that California-based C.R. Laurence Co. Inc., Florida-based Southeastern Aluminum Products Inc. and Texas-based Waterfall Group LLC have agreed to pay $2,300,000, $650,000 and $100,000, respectively, to resolve a lawsuit brought by the United States under the False Claims Act alleging that the companies engaged in schemes to evade customs duties on imports of aluminum extrusions from the People’s Republic of China (PRC).”

U.S. Glass quoted C.R. Laurence Co., Inc. president, Lloyd Talbert, “"While we deny engaging in any of the alleged wrongful conduct, we are happy to have reached this settlement agreement so that we can ensure that our resources and focus remain on best serving our customers' needs without further cost or distraction."

As you may recall, Basco Manufacturing Co., agreed to settle for $1.1 million dollars late in 2013.

This brings the total fines paid to $4.1 million.  In addition to the heavy fines, the results speak to importers vulnerability to such lawsuits when importing products.  Even if an importer believes product is not coming from the PRC and subject to duties, if it is, they could be pulled into a potentially embarrassing and expensive lawsuit.  It also demonstrates the power of the False Claims Act. As reported here, this program allows companies and employees to come forward as ‘whistleblowers’  in cases such as these.  It also rewards whistleblowers by sharing a portion of the fines collected.  In this case, the Yuma News reported the whistleblower in this case will receive $555,000.

It is important that the aluminum extrusion industry, and their customers, understand that the Department of Justice will investigate, convict, and punish wrongdoers.

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