Garment Wholesaler Settles Customs Duty Evasion Lawsuit for $1 Million
The Justice Department settled a fraud lawsuit involving customs duty evasion with Notations, a garment wholesaler, the U.S. Attorney's Office for the Southern District of New York said in an Oct. 3 news release. The wholesaler, Notations, will pay $1 million in damages and implement compliance measures as part of the settlement, it said. The DOJ filed a civil suit last year against Notations and an importer, Yingshun Garments (see 1609280038).
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The company "repeatedly ignored warning signs that its business partner, which imported garments from China, was engaged in a scheme to underpay customs duties owed on the imported garments it sold," the DOJ said. As part of the settlement agreement, Notations "admits and accepts responsibility for failing to act in response to indications of fraudulent conduct," it said. Notations will implement a "written customs compliance policy" and provide yearly updates to the DOJ and CBP, according to the settlement. The company must also "monitor the conduct of its business partners who act as importers of overseas goods, and ... report all potentially fraudulent conduct to CBP," it said.
Notations aided Yingshun's scheme by ignoring signs that Yingshun's "irregular business practices were highly suggestive of fraud," the DOJ said. Notations was the biggest customer of Yingshun, which allegedly "presented false and fraudulent invoices to CBP, showing prices for imported garments that were discounted by 75 percent or more, for the purpose of avoiding customs duties on the garments," the DOJ said. “As this settlement makes evident, companies purchasing imported goods cannot turn a blind eye to fraud committed by their business partners," Acting U.S. Attorney Joon Kim said. "We will be vigilant in holding accountable all parties who engage in or contribute to fraudulent conduct.”