An Indiana-based furniture company that filed a federal whistleblower lawsuit against a competitor for evading U.S. import duties on deliveries from China will collect $2.25 million as part of a settlement.
Separately, University Loft Company will receive an additional $1.3 million from Texas-based University Furnishings to resolve a lawsuit that University Loft filed in Texas state court, bringing the total it will receive from its competitor to $3.55 million.
University Furnishings allegedly classified imports from China as office and other types of furniture not subject to duties while selling the furniture in the student housing market for use in dormitory bedrooms.
University Loft first made the allegations in a lawsuit it filed under the qui tam or whistleblower provisions of the False Claims Act. Texas-based University Furnishings LP and its general partner, Freedom Furniture Group Inc., agreed to pay $15 million to resolve the FCA suit.
The False Claims Act allows whistleblowers to receive a share of any funds recovered through lawsuits they bring on behalf of the U.S. government. University Loft’s share of the FCA settlement was $2.25 million.
The United States assesses and collects antidumping duties to protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.
“Companies that cheat, by fraudulently mislabeling their imports, undermine U.S. manufacturers and others that obey the rules, and hurt consumers and taxpayers,” U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas said in a statement.
The False Claims Act lawsuit was United States ex rel. University Loft Company v. University Furnishings, LP, et al., No. A13-CV-678 (W.D. Tex.).
The DOJ said the claims resolved by the settlement were allegations only and there has been no determination of liability.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.