RECOTON SENTENCED FOR U.S. CUSTOMS IMPORT VIOLATIONS
Recoton Corp. was ordered by U.S. District Court in Orlando, Fla., this
week to pay $6 million for 15 counts of smuggling.
The fine was the highest amount that the court could impose under the
federal sentencing guidelines. The fine is also believed to be the largest
corporate fine imposed in the Middle District of Florida.
The investigation, which began in 1994, involved allegations that
Recoton had fraudulently marked imported consumer electronics with false country of
origin. The company also undervalued the imported goods to pay lower Customs duties.
Customs estimated the loss in revenue to be $4.1 million.
On July 23, Recoton, based in Lake Mary, Fla., submitted a compromise to
Customs’ Office of Regulations and Rulings whereby it would pay the agency $14 million in
penalties and duties to resolve the civil claims.
The agreement with Customs also stipulated that the penalty would be
reduced by the amount of the criminal fine imposed by the District Court. Customs will now
receive $6 million, payable over 36 months, to settle the case.
Customs based its investigation of Recoton on thousands of seized import
records. The agency also conducted interviews with the company’s suppliers in Hong Kong,
Taiwan, New York and Connecticut.