Whistleblower who reported systematic skirting of customs duties on the importation of dietary supplements to receive over $4.5 million.
WASHINGTON, Jan. 30, 2023 (GLOBE NEWSWIRE) — Sanford Heisler Sharp today announced that International Vitamin Corporation (“IVC”), a leading importer of dietary supplements, has agreed to pay the United States Government $22.865 million to settle claims brought by a whistleblower under the False Claims Act. The suit was filed by Sanford Heisler Sharp in 2019 in the United States District Court for the Southern District of New York. The case is thought to be among the largest ever False Claims Act settlements involving customs fraud.
The whistleblower, a former accountant for IVC, alleged that IVC systematically skirted customs duties on thousands of imports of nutritional supplements from China between January 1, 2015 and September 13, 2019. Under United States customs law, any goods imported into the United States must be declared to United States Customs and Border Protection, and the importer must certify information about the goods, including the volume, cost, and applicable tariff. The whistleblower alleged that IVC knowingly submitted false documentation to avoid customs duties on 32 products and continued to do so well after it knew that the tariff classifications it was using were incorrect. IVC also failed to notify the Government of the misclassifications and pay duties on its past imports as required under federal law, according to the settlement.
The whistleblower was represented by Sanford Heisler Sharp Partner and General Counsel Russell Kornblith and Whistleblower Practice Co-Chair John McKnight.
“Customs fraud harms all Americans and particularly American workers,” said Kornblith. “Because of the whistleblower’s courage to do the right thing, the United States has recovered more than $20 million, American businesses can better compete with China, and the whistleblower has earned a well-deserved $4.5 million reward,” Kornblith continued.
The False Claims Act is one of the federal government’s most important anti-fraud tools. Under the Act, whistleblowers (called relators), may bring a lawsuit on behalf of the government to recover money that a person or corporation has evaded paying to the United States government. If the government is successful in recovering money, the whistleblower shares in the government’s recovery, receiving a whistleblower award. Intentionally evading customs duties is fraud within the meaning of the False Claims Act.
“Customs fraud remains a serious problem,” said McKnight. “The United States imports hundreds of billions of dollars of goods each month. The government cannot police these imports alone. Whistleblowers—both in the United States and abroad—have an important role to play in assisting the government’s enforcement of tariff and import laws,” McKnight added.
This is Sanford Heisler Sharp’s second significant whistleblower settlement based on claims of customs fraud. In 2018, Sanford Heisler Sharp settled a False Claims Act case that alleged several violations of U.S. customs law by jeweler Temple St. Clair. The firm continues to seek whistleblowers with knowledge of import fraud.
About Sanford Heisler Sharp
Sanford Heisler Sharp is a public interest and civil rights law firm with offices in New York, Washington, DC, San Francisco, Palo Alto, Atlanta, Baltimore, Nashville, and San Diego. The firm focuses on employment discrimination, Title IX, wage and hour, whistleblower and qui tam, criminal/sexual violence, financial services, and Asian American litigation and finance matters. Our lawyers have recovered over $1 billion for our clients through many verdicts and settlements.
In 2022, The National Law Journal named Sanford Heisler Sharp Civil Rights Firm of the Year, and it recognized the firm in 2021 as both the Employment Rights Firm of the Year and the Human Rights Firm of the Year. Law360 recognized the firm as Employment Practice Group of the Year in 2021, 2019, 2018, and 2016. Benchmark Litigation recognized the firm as the Labor & Employment Firm of the Year in 2021 and 2020.
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