In The News

California-Based Z Gallerie LLC Agrees to Pay $15 Million to Settle False Claims Act Suit Alleging it Evaded Customs Duties

If you have knowledge of fraud that has been committed against the government you should report it and consult a false claim act lawyer. A false claims act attorney will inform you about your rights in these cases. Sometimes the government’s crackdown on fraud helps to protect private companies as well as governmental agencies.  This is illustrated by its enforcement of anti-dumping laws designed to protect private industry.  Last month the Justice Department announced that Z Gallerie LLC agreed to pay $15 million to resolve allegations that it engaged in a scheme to evade custom duties on imports of bedroom furniture from China in violation of the False Claims Act.  Z Gallerie is a seller of furniture and accessories throughout the United States.  The company’s headquarters are in Los Angeles, California.  “This settlement reflects the Department of Justice’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.

In this case, it is alleged that Z Gallerie attempted to evade antidumping duties.  These regulations are designed to protect domestic manufacturers from foreign companies “dumping” products on US markets at prices below cost.  Imports of wooden bedroom furniture made in China have been subject to antidumping duties since 2004.  The Department of Commerce and the Department of Homeland Security and Border Protection (CPB) assesses and collects anti-dumping duties.  The settlement resolved allegations that Z Gallerie evaded antidumping duties on furniture imported from the PRC from 2007 to 2014.  Moreover, Z Gallerie is alleged to have done so by misclassifying, or conspiring with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents it presented to (CPB).

“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,” said CBP Commissioner R. Gil Kerlikowske.  “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.

The allegations in this case were originally brought by whistleblower Kelly Wells, an e-commerce furniture retailer, under the qui tam provisions of the False Claims Act.  The act permits private parties to sue on behalf of the United States and to collect a share of any settlement in cases of fraud.  Wells is expected to receive $2.4 million as her share of the settlement.