Two Individuals Agree to Pay $435,000 in AD/CVD False Claims Act Case

On September 4, 2015, the U.S. Department of Justice announced that two individuals, Robert Wingfield, of Texas, and Bill Ma, of New Jersey, have agreed to pay $385,000 and $50,000, respectively, to resolve a lawsuit brought by the United States under the whistleblower provisions of the False Claims Act.  The suit alleged that these individuals engaged in a scheme to evade antidumping and countervailing duties on imports of aluminum extrusions from the People’s Republic of China (PRC).  The Department of Justice previously settled claims with four other importers allegedly involved with the scheme.  On November 14, 2013, it was announced that Ohio-based Basco Manufacturing Co. agreed to pay $1.1 million.  On February 12, 2015, the Department of Justice announced that three companies involved in the scheme, California-based C.R. Laurence Co. Inc., Florida-based Southeastern Aluminum Products Inc. and Texas-based Waterfall Group LLC., agreed to pay $2,300,000, $650,000 and $100,000, respectively.

The claims centered a scheme in which the defendants allegedly shipped aluminum extrusions manufactured in China to Malaysia then falsely labeled the aluminum extrusions as originating in Malaysia in order to circumvent the antidumping and countervailing duties assessed on aluminum extrusions from China.  Furthermore, the U.S. government alleged that the defendants knew that the aluminum extrusions were merely repackaged in Malaysia and did not undergo a substantial transformation that may have justified changing the products country of origin from the PRC to Malaysia.   This type of scheme is known as “transshipping.”

Mr. Wingfield was the U.S. sales representative for Tai Shan Golden Gain Aluminum Products Ltd., which  was the Chinese exporter of the aluminum extrusions at issue.  The complaint alleged that Wingfield conspired with the above-mentioned domestic importers to submit false information to the government in order to evade the duties.  The complaint also alleged that Mr. Ma later formed a company, Northeastern Aluminum Corp., to act as the importer of record for the goods in an attempt to shield the actual importers from liability.  Mr. Wingfield also pleaded guilty to one count of using false statements to import goods into the United States.

The allegations resolved by the settlements were originally brought by whistleblower James F. Valenti Jr. in the U.S. District Court for the Middle District of Florida under the qui tam provisions of the False Claims Act.  These provisions allow private parties who have knowledge of fraud against the government to file suit on behalf of the government.  If the case is eventually successful, the whistleblower is entitled to receive a portion of the money recovered by the government.  Mr. Valenti will receive approximately $79,000 as his share of the Wingfield and Ma settlements.  Mr. Valenti also received $555,000 as his share of the February 2015 settlements.

If you have questions about the False Claims Act, antidumping duties or AD/CVD evasion, please contact Frohsin & Barger at 205.933.4006 ext. 5.