Importers’ competitor wins whistleblower award in Department of Justice settlement

by Ben Vernia | February 23rd, 2016

On February 22, the Department of Justice announced that a company that brought a qui tam suit against its competitors for evading antidumping duties will receive nearly a half million dollars as its share of a $3 million settlement with four Pennsylvania-based companies and two individuals. In addition, DOJ’s press release described the guilty plea of one corporation:

The Department of Justice announced today that three importers and their owners – Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., Ajay Goel and Thomas Diener – and a related importer, SMC Machining LLC, incorporated at Goel’s direction and formerly owned by his wife, have agreed to pay $3 million to resolve a lawsuit brought by the United States under the False Claims Act.  The lawsuit alleged that the defendants had engaged in a scheme to evade customs duties on imports of small-diameter graphite electrodes from the People’s Republic of China (PRC).  Small-diameter graphite electrodes are columns of synthetic graphite with diameters of around 16 inches or less that are used as fuel in electric arc and ladle furnaces, such as those used in steel manufacturing.  The companies are all based in Pennsylvania.

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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 on April 27, 2011 and June 9, 2011, 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.

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The Government announced that the whistleblowing company will receive approximately $480,000 (a 16% relator’s share).

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