The upscale furniture retailer Z Gallerie LLC has agreed to pay $15 million to settle allegations that the company engaged in a scheme to evade customs duties on imports of wooden bedroom furniture from the People’s Republic of China, in violation of the False Claims Act.
Between 2007 and 2014, Z Gallerie allegedly misclassified, or conspired with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents presented to U.S. Customs and Border Protection (CBP). For example, Z Gallerie 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.
“This settlement reflects the Justice Department’s commitment to ensure that those who import and sell foreign-made goods in the United States comply with the law, including laws meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
The Department of Commerce assesses, and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects, duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies “dumping” products on U.S. markets at prices below cost.
“Companies that intentionally mislabel shipments or misrepresent the value of goods being imported into the United States to avoid paying the appropriate duties do so in an attempt to create an unfair advantage over businesses that play by the rules,” said Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) in Atlanta.
U.S. Attorney Edward J. Tarver for the Southern District of Georgia, whose district includes the Port of Savannah, a major hub for international trade, vowed to hold accountable those who attempt to cheat their way out of paying customs duties. “This U.S. Attorney’s Office will work hard to make sure those using the Port of Savannah play by the rules,” he said.
The allegations resolved by the settlement were originally brought by whistleblower Kelly Wells, an e-commerce retailer of furniture, who sought to expose Z Gallerie’s alleged customs duty evasion scheme. Under the new Trade Facilitation and Trade Enforcement Act, CBP will likely see an increase in these types of settlements as the streamlined processes take effect concerning allegations of duty evasion.
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Key Facts
- State: California
- Category: White Collar Crime|Organized Crime
- Source: DOJ Press Release â†â€â€
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