Importer Wins Whistleblower Suit Over Procurement Rules
A California federal judge on March 26 awarded victory to an importer in a False Claims Act lawsuit that alleged it sold improperly sourced goods to the federal government. Judge William Alsup of the U.S. District Court for the Northern District of California found Matthew MacDowell -- the whistleblower with alleged information that the company violated the FCA -- did not have direct knowledge of wrongdoing.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
MacDowell, a former of employee of Synnex competitor United Office Solutions, Inc., said that Synnex was awarded government contracts to provide IT products to the federal government. Synnex allegedly imported American Power Conversion Corporation products that had components made in China by Huawei Technologies and in the Philippines -- a violation of the Trade Agreements Act of 1979 since China is a non-designated country.
The court found MacDowell lacked first-hand knowledge of this alleged illicit product sourcing. “To qualify as an original source under the pre-2010 version of the [FCA], a relator must show that he has direct and independent knowledge of the information on which his allegations are based,” the decision said. MacDowell received his information from internet research of public details and via his employment with United Office Solutions, but he never inspected his employer's records of transactions from before his employment. Under testimony, MacDowell also failed to recall basic information regarding a transaction between his former employer and the government, including whether open market transactions had to be TAA-compliant.
Email ITTNews@warren-news.com for a copy of the summary judgment.