Four Pennsylvania-Based Companies and Two Individuals Agree to Pay $3 Million to Resolve Alleged False Claims Act and Customs Violations
Occasionally, the government’s crackdown on fraud touches businesses that have an international clientele. This was shown last February when the Department of Justice announced that three Pennsylvania-based importers – Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc. – and their owners, Ajay Goel and Thomas Diener, had agreed to pay $3 million to resolve violations of the False Claims Act. The lawsuit alleged that – among other things – the companies had engaged in a scheme to evade custom duties on small diameter graphite electrodes from the People’s Republic of China (PRC). (Small diameter electrodes are used as fuel in electric arc and ladle furnaces which are used in the production of steel.) Imports of PRC-manufactured small-diameter graphite electrodes have been subject to antidumping duties since Aug. 21, 2008. “This settlement shows that the Department of Justice is committed to pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including the individuals who run the companies and knowingly participate in such schemes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division at the time.
The settlement resolved allegations that from December 2009 to March 2012 Ameri-Source International Inc. evaded anti-dumping duties on 15 shipments of small diameter electrodes it had imported from the PRC. Moreover, the government alleged that Ameri-Source and other companies conspired in a scheme to evade duties on these imports. Ameri-Source International would later plead guilty to two counts of smuggling based on the charges. It also admitted to misrepresenting the size of the graphite rods. The corporation was sentenced to pay a $250,000 criminal fine within 10 days. “This settlement underscores one of HSI’s primary efforts, which is to ensure a level playing field for companies engaged in legitimate trade and commerce with the United States,” said Special Agent in Charge John Kelleghan of Homeland Security Investigations (HSI) Philadelphia. “HSI special agents will continue to protect the revenue of the United States and aggressively investigate individuals and companies who attempt to operate outside our laws and regulations.”
The allegations that were resolved by the settlement were brought about by a whistleblower at Graphite Electrode Sales Inc. under the provisions of the False Claims Act. This act permits private parties to sue on behalf of the government in cases of False Claims Act violations and to share in any recover that comes as a result of the lawsuit. Graphite Electrode Sales Inc. received approximately $480,000 as its share of the settlement. If you know of abuse that has been committed against the government or one of its agencies you are encouraged to report it and to contact a qui tam lawyer. A qui tam attorney can advise you in such matters and will work to protect your rights under the law.
