International Vitamins Corporation (IVC), a U.S.-based importer of vitamins and supplements from China, has been nailed with a $22,865,055 civil settlement for a years-long scheme to dodge customs duties. Federal prosecutors in Manhattan announced the resolution of a fraud lawsuit accusing IVC of systematically misclassifying more than 30 products under the Harmonized Tariff Schedule (HTS) to falsely claim duty-free status — a move that shortchanged the U.S. Treasury millions.
The fraud spanned from 2015 to 2019, during which IVC submitted or directed its customs brokers to file false entry documents for shipments of raw and bulk nutritional products. By labeling dutiable goods as duty-free, IVC avoided paying legally required import tariffs. Even after bringing in a consultant in 2018 who confirmed the misclassification, the company delayed correcting its filings for over nine months — and never paid back the duties it owed, despite knowing the debt.
Under the settlement approved by U.S. District Judge Mary Kay Vyskocil, IVC admitted to using incorrect HTS codes for 32 Covered Products imported from China, all of which should have incurred duties. The company acknowledged that accurate classification would have triggered payment obligations, but instead continued to exploit loopholes until federal scrutiny forced action. No criminal charges were filed, but the civil penalty sends a clear message: customs fraud won’t go unpunished.
“IVC engaged in a fraudulent scheme to avoid customs duties owed to the United States by misclassifying many of its products as duty-free when importing them from China,” said U.S. Attorney Damian Williams. “Worse yet, IVC made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed.”
CBP Executive Assistant Commissioner AnnMarie R. Highsmith emphasized that IVC ignored prior CBP rulings on proper classification. “This case reflects a pattern of behavior in which this company knowingly misclassified imported merchandise to avoid paying duties,” she said. “Their failure to adhere to the customs laws, which are designed to protect U.S. revenue and U.S. consumers, will cost the company more than $22.8 million.”
CBP Director of Field Operations Francis Russo hailed the outcome as a win for fair trade. “U.S. Customs and Border Protection provided the critical link to an ongoing investigation into an attempt to circumvent payment of proper duties,” Russo said. “This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.”
Related Federal Cases
Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
