Customs Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Basco Manufacturing Co who is accused of making false customs declarations to avoid paying duties on products imported from a Chinese manufacturer.

The whistleblower's share of the government's settlement has not been determined.

The original whistleblower case that lead to the government's complaint was filed in 2011.  The government alleged that Basco and the companies named in the combined lawsuit stemming from separate whistleblower cases, made false declarations to the U.S. Department of Homeland Security Customs and Border Protection to avoid paying antidumping and countervailing duties on aluminum extrusions imported from manufacturer Tai Shan in the People’s Republic of China (PRC). Allegedly, these companies misrepresented that the aluminum extrusions, which are used in the manufacture of shower enclosures and other products, were imported from Malaysia.  The complain further alleged that Basco and the defendants knew that the aluminum extrusions were merely repackaged in Malaysia and did not undergo a substantial transformation that may have justified changing the product’s country of origin from the PRC to Malaysia.

A settlement has been reached in a whistleblower class action lawsuit brought against Sea Star Line LLC and Horizon Lines LLC, who are accused of fixing the price of government cargo transportation contracts between the continental United States and Puerto Rico.

Under the settlement agreements, Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million. The whistleblower will receive $512,719 of the recovered funds.

The case was originally filed by the whistleblower in 2013. The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes. This information allowed the shippers to allocate specific routes between themselves at predetermined rates. Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food. Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.