Basco Manufacturing Co. (“Basco”) has agreed to pay $1.1 million to resolve a whistleblower’s allegations that it made false customs declarations to avoid paying duties on products imported from China. The products involved were aluminum extrusions, which are used in the manufacture of shower enclosures.
As alleged by the whistleblower, Basco represented to the government that aluminum extrusions were imported from Malaysia, rather than China. By routing the products through Malaysia and misrepresenting their true origin, Basco avoided having to pay antidumping and countervailing duties applicable to Chinese products. The government claimed that Basco knew that the products were simply repackaged in Malaysia and were not substantially transformed to the extent that the country of origin could change from China to Malaysia.
By exposing this scheme through the filing of a False Claims Act lawsuit, the whistleblower is entitled to receive a share of the settlement proceeds. The amount of this share has not been determined.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/November/13-civ-1221.html