Target Corp., Staples Inc., and OfficeMax, Inc., Among Pencil Importers The Subject of a False Claims Act Case Brought by The Cullen Law Firm, PLLC
WASHINGTON, May 17, 2012 /PRNewswire-USNewswire/ -- A Federal District Court in Washington, DC unsealed a False Claims Act (FCA) case against major retailers accused of transshipping Chinese made pencils to avoid antidumping duties. The case is being pursued by the Cullen Law Firm.
During late 1994 the Department of Commerce imposed antidumping duties on imports of pencils from China. The antidumping duty rate has varied over the years but has remained at 114.9 percent since 2003. A whistle-blower came to the firm in 2007 with evidence of rampant transshipment of Chinese made pencils through third countries such as Taiwan, Indonesia and Vietnam by U.S. importers. The importers would knowingly buy Chinese made pencils in those countries and claim to U.S. Customs that they originated in those countries. As a member of the U.S pencil industry, our client sought the firm's assistance in stopping that practice.
After additional investigation the firm filed a FCA complaint under seal in May 2008. The four named defendants are Staples Inc., OfficeMax, Inc., Target Corp., and Industries for the Blind. Through our investigation we were able to identify specific importations made by each of the four defendant companies. If the allegations in the complaint are proved, the defendants are subject to three times the loss of revenue to the government, which in this case equals the unpaid antidumping duties and a 10 percent duty for false country of origin marking. In addition, the defendants are liable for penalties of between $5,500 and $11,000 per false claim.
Under the FCA whistle-blowers are entitled to receive between 15 to 30 percent of the amount recovered by the government.
FCA complaints are filed under seal in order to give the government an opportunity to investigate the allegations in the complaint. In this case the government took four years to investigate in part because foreign component of the investigation. While the allegations against the defendants have in large part been substantiated, on April 2, 2012 the Department of Justice asked the Court to unseal the complaint to allow the whistle-blower and his counsel to continue with the action against the defendants. On May 1, 2012, the Court issued an order unsealing the case.
Based on the evidence that it currently has gathered, the Cullen Law Firm is confident that it will prove the allegations against defendants and resolve this case successfully for the government and our client.
For further information please contact: Joseph A. Black
The Cullen Law Firm, PLLC
1101 30th Street, NW
Washington, D.C. 20007
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