Pennsylvania garment importer to pay $1m in false claims case

U.S. Immigration and Customs Enforcement (ICE) said Warminster, Pa.-based garment importer Notations “repeatedly ignored warning signs that its business partner, which imported garments from China, was engaged in a scheme to underpay customs duties.”    Notations, a Warminster, Pa.-based garment wholesaler, has agreed to pay a $1 million civil penalty to settle alleged violations of the False Claims Act, according to a statement from the U.S. Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP).
   The government’s complaint against Notations said 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 to Notations.”
   The complaint also noted that Yingshun Garments, an importer of Chinese manufactured women’s apparel, and Import Global Designs and Olgrem, successor entities to Yingshun, along with Marie Rogers, an owner and officer of each entity, engaged in a “double-invoice scheme” whereby Yingshun (and later Import Global and Olgrem) presented 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. 
   “Notations, which was Yingshun’s biggest customer, aided the fraudulent scheme by ignoring warning signs that Yingshun’s irregular business practices were highly suggestive of fraud,” ICE said.
   In addition to the fine, Notations has agreed to implement a compliance program to prevent future fraud by itself or business partners. These measures includes a written compliance policy, educating employees on how to identify “red flags” for fraudulent import transactions, monitoring conduct of business partners who act as importers of overseas goods, and reporting all potential fraudulent conduct to CBP.  
   Meanwhile, claims against Yingshun, Import Global, Olgrem and Rogers are pending. The U.S. government’s case is being prosecuted by the U.S. attorney for the Southern District of New York Office’s Civil Frauds Unit.