Linde companies pay over $22 million to settle whistleblower’s allegations of import fraud

by Ben Vernia | October 20th, 2020

On September 25, the Department of Justice announced that the German company Linde GmbH and its American subsidiary have agreed to pay $22.2 million to settle allegations, originally brought by a whistleblower, that the companies committed import fraud. According to DOJ’s press release:

Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”) have agreed to pay the United States more than $22.2 million to resolve allegations that Linde violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying duties owed on the companies’ imports, the Justice Department announced today.

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Linde GmbH is a multinational corporation headquartered in Germany that, among other things, imports materials into the United States for use in the construction of natural gas and chemical manufacturing plants.  Houston-based LENA managed procurement and logistics for Linde, which imported more than $500 million in goods into the United States between 2011 and 2017.

To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are covered by antidumping or countervailing duties, and the amount of duties owed.  U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed.  It is the importer’s affirmative duty to use “reasonable care” to make sure that such information is accurate so that CBP can assess the proper duties.

The United States alleged that, between 2011 and 2017, Linde avoided duties owed to the United States, including in some instances antidumping and countervailing duties, by misrepresenting the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.  

Prior to the United States’ disclosure to Linde of its investigation, Linde made a partial disclosure to CBP regarding its importing practices.  In the settlement, the United States acknowledged Linde’s cooperation.

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The government announced that the whistleblower, , will receive $3.7 million (a 16 2/3% relator’s share).

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