Furniture company pays $500,000 to settle whistleblower’s False Claims Act allegations

by Ben Vernia | March 7th, 2018

On February 6, the Department of Justice announced that Tennessee-based Home Furnishings Resource Group, Inc., had agreed to settle a competitor’s whistleblower lawsuit for $500,000. According to DOJ’s press release:

The Department of Justice announced today that Home Furnishings Resource Group Inc. (HFRG) has agreed to pay $500,000 to resolve allegations that it violated the False Claims Act by making false statements on customs declarations to avoid paying antidumping duties on wooden bedroom furniture imported from the People’s Republic of China (PRC).  HFRG, which also operates under the name Function First Furniture, imports, among other things, bedroom furniture that is sold for use in university student housing.  The company is headquartered in Hermitage, Tennessee.

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The settlement announced today resolves allegations that HFRG evaded antidumping duties owed on wooden bedroom furniture that the company imported from the PRC between 2009 and 2014, by misclassifying the furniture as non-bedroom furniture on its official import documents.  Antidumping duties protect against foreign companies “dumping” products on the U.S. market at prices below cost.  The Department of Commerce assesses, and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects, these duties to protect U.S. businesses and level the playing field for domestic products.  Imports of PRC-made wooden bedroom furniture have been subject to antidumping duties since 2004.  At the time of the alleged conduct in this case, wooden bedroom furniture from the PRC was subject to a 216 percent antidumping duty; non-bedroom furniture was not subject to any antidumping duty.

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The whistleblower, Universal Loft Company, will receive $75,000 of the settlement (a 15% relator’s share).

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