The US Department of Justice issued a press release on September 25, 2020, that said that Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”)” agreed to settle False Claims Act charges that they “knowingly made false statements on customs declarations to avoid paying duties owed on the companies’ imports,” The Justice Department announced today said that the settlement was for $22.2 million.
Acting Assistant Attorney General Jeffrey Bossert Clark, for the Department of Justice’s Civil Division, said that the agreement reflects the government’s commitment to holding responsible anyone or any company that seeks to avoid paying import duties on goods – “including antidumping and countervailing duties that level the playing field for U.S. manufacturers.” said Acting Assistant Attorney General Jeffrey Bossert Clark further added that the DOJ files FCA claims like this one to help ensure the US markets are fair – that nobody has an unfair advantage by “bringing underpriced goods into this country.”
The First Assistant US Attorney for the Eastern District of Pennsylvania added that America’s economic stability and security depend on fair trade policies. She added, “anti-dumping and countervailing duties ensure that American manufacturers are protected from unfair trade practices, and valuation requirements help to ensure that importers do not have an incentive to use foreign engineers instead of hiring in the United States.”
The DOJ worked with the Pennsylvania Eastern District’s US attorney, and the US Customs and Border Protection (CBP) agency to bring the False Claims Act case against the defendants. The executive assistant commission of the CBP Office of Traded added that the settlement confirms the government’s commitment to collecting revenue for the American public.
Linde GmbH is a multinational corporation. It has its headquarters in Germany. Among other activities, Linde GmbH imports materials into America to be used for constructing manufacturing and natural gas plants. One of the defendants, 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.”
Generally, importers of goods into America must declare:
- The country where the goods came from – the country of origin
- The value of the goods
- Whether the goods are covered by antidumping or countervailing duties
- The amount of duties owed on the imported items
The False Claims Act allegations
The government said that, “U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed.” According to the government representatives, importers have an affirmative duty to use “reasonable care” to ensure the information on the declarations is accurate so that the U.S. Customs and Border Protection can properly assess the duties on the goods.
The US Department of Justice asserted that Linde avoided duties it owed the US (between 2011 and 2017)- including in some instances antidumping and countervailing duties – by failing to comply with the above disclosure requirements. The DOJ asserts that Linde misrepresented “the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.”
Before the US disclosed it was investigating Linde, Linde had made a partial disclosure of its importing practices to CBP. The settlement, announced in the press release, does acknowledge this cooperation by Linde.
The whistleblower part of the False Claims Act claim
Many False Claims Act cases which are brought by the US Department of Justice are initiated by a whistleblower. Whistleblowers are often former or even current employees of the companies that are charged with submitting false or illegal claims – or companies created just to give the impression the bills are legitimate. The False Claim Act’s qui tam provisions provide that whistleblowers may file a disclosure statement with the DOJ asserting that the employer or any entity is submitting false bills to government agencies.
The disclosure statements have strict requirements which the whistleblower should review with an experienced California False Claims Act lawyer. For example, the disclosure can’t be public knowledge and it can’t include the same information that someone else already submitted to the DOJ.
The US Department of Justice, after reviewing and investigating the disclosure statement, can decide to intervene – which means it agrees to pursue the False Claims Act claims against the wrongdoers. If the DOJ declines to intervene, then the whistleblower (with the help of experienced whistleblower lawyers) can file a direct claim against the wrongdoers. If the disclosure ultimately leads to a recovery, the whistleblower is entitled to a significant part of the recovery. This amount is generally somewhat lower if the DOJ decides to intervene than if the DOJ declines intervention.
In this case, the whistleblower filed a claim in the Eastern District of Pennsylvania. The case caption is United States ex rel. Johnson v. Linde AG, et al., No. 17-cv-1012. The whistleblower, as announced in the press release, was awarded approximately $3.7 million, nearly 15% of the overall settlement.
The settlement involved the work of:
- The U.S. Attorney’s Office for the Eastern District of Pennsylvania
- The Commercial Litigation Branch of the Justice Department’s Civil Division
- The CBP’s Office of Chief Counsel
- CBP’s Regulatory Audit and Agency Advisory Services.
The False Claims Act settlement are “allegations only, and there has been no determination of liability.”
At the California Law Offices of Stephen A. Danz and Associates, we have been assisting whistleblowers for decades with their qui tam actions. We understand the requirements for a proper disclosure statements, which types of false claims the DOJ is likely to pursue, and which types of misconduct can be pursued if the DOJ declines to intervene. To discuss a medical fraud, import fraud, or any other type of whistleblower claim, call us at 877-789-9707 or fill out our online contact form to make an appointment. Se habla espanol/