Ameri-Source Intl Settles False Claims for $3M; Whistleblowers to Get $480K
Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., and their owners Ajay Goel and Thomas Diener, have agreed to pay $3 million to resolve allegations that they knowingly submitted or caused the submission of false claims by evading customs duties on imports of small diameter graphite electrodes from China, the U.S. Department of Justice announced yesterday.
The Department of Commerce assesses and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies’ “dumping” products on U.S. markets at prices below cost. Imports of PRC-manufactured small-diameter graphite electrodes have been subject to antidumping duties since 2008.
The settlement announced today resolves claims that Ameri-Source International Inc. evaded antidumping duties on 15 shipments of small-diameter graphite electrodes from the PRC from December 2009 to March 2012. The United States contended that Ameri-Source International misclassified the size of the electrodes to avoid paying the duties. There are no antidumping duties on larger diameter graphite electrodes. The United States also alleged that Goel, Diener and the other companies caused and conspired in the misrepresentation to evade duties. Ameri-Source International also waived indictment and pleaded guilty today to two counts of smuggling goods into the United States. In U.S. District Court in the Western District of Pennsylvania, Ameri-Source International admitted that the company falsely declared imported cargo from the PRC as being graphite rods greater than 16 inches in diameter. Chief Judge Joy Flowers Conti immediately sentenced the corporation to pay a $250,000 criminal fine within 10 days and applied the payment of the $3 million to the loss of antidumping duties of $2,137,420.00.
The allegations resolved by the settlement were originally brought by whistleblower Graphite Electrode Sales Inc. under thequi tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the government those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The United States may intervene in and take over the lawsuit, as it has done here. The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. Graphite Electrode Sales Inc. will receive approximately $480,000 as its share of today’s settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.