An industrial manufacturer employee was awarded $3.7 million for informing the U.S. Department of Justice about a scheme to cheat the government out of import duties on underpriced goods. On September 25, 2020, the Justice Department announced that Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (“LENA”), had agreed to pay about $22.2 million to resolve False Claims Act allegations stemming from deliberate, false statements on customs declarations made to avoid paying import duties, aka tariffs. The scheme allegedly violated U.S. anti-dumping laws that protect U.S. manufacturers from having the market flooded with cheap, foreign goods.
The United States trade policy is designed to protect U.S. industries by imposing tariffs on lower-priced goods and thereby creating price parity with similar American goods. The current administration has often said that free trade must be fair trade. But it appears that Linde, a multinational corporation headquartered in Germany, was not playing fair.
The U.S. Department of Justice alleged that, between 2011 and 2017, Linde misrepresented the “nature, classification, and valuation of imported merchandise,” as well as “the applicability of free trade agreements,” in a deliberate attempt to avoid duties owed to the United States. The goods in question were valued at more than $500 million.
As Jennifer Arbittier Williams, First Assistant U.S. Attorney for the Eastern District of Pennsylvania, explained, “Trade policy is a critical part of our nation’s economic stability and security. 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.”
Since tariff evasion is a form of fraud against the U.S. government, the alleged offenses fell under the federal False Claim Act. That law allows private citizens, acting as whistleblowers, to come forward and sue the company on behalf of the government in what is known as a qui tam lawsuit.
To qualify as a whistleblower, or what the law calls a relator, a person must have unique, nonpublic information related to fraud against the government, and must be the first person to file a complaint exposing the wrongdoing. If the information leads to a successful prosecution or settlement of the charges, the whistleblower is entitled to a cash reward equal to 15 to 30 percent of the government’s recovery.
In this case, a woman identified only as Ms. Johnson initiated the action by filing a qui tam lawsuit in the Eastern District of Pennsylvania and will receive approximately $3.7 million. Ms. Johnson is also fully protected against retaliation for her whistleblower activity, so her job is secure.
If you have inside information about an employer’s fraud against the state or federal government, speak to a knowledgeable attorney at Halperin Bikel, PLLC at 929.290.1266 or online. We have recovered more than $10 billion in whistleblower cases. We can provide the advice and guidance necessary to present a compelling case that maximizes your potential reward.