Furniture importer to pay $15 million for duty evasion

Texas-based University Furnishings has agreed to pay $15 million to resolve a lawsuit brought under the False Claims Act that it evaded duties on furniture imports from China.

   University Furnishings and its general partner, Freedom Furniture Group Inc., have agreed to pay $15 million to resolve a lawsuit brought under the False Claims Act alleging that the companies made false statements to avoid paying U.S. Customs duties on wooden bedroom furniture imported from China, the Justice Department announced Monday. 
   The U.S. government alleged that between 2009 and mid-2012, Texas-based University Furnishings, which sells furniture for student housing, knowingly made the false duty claims to CBP. Specifically, the company allegedly classified the furniture as office and other types of furniture not subject to duties while selling the furniture in the student housing market for use in dormitory bedrooms. The Commerce Department assesses and CBP collects antidumping duties to protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.   
   “Companies that cheat, by fraudulently mislabeling their imports, undermine U.S. manufacturers and others that obey the rules, and hurt consumers and taxpayers,” said U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas, in a statement. “We are hopeful that today’s settlement will help deter others from this type of scheme.”
   The allegations resolved by the settlement were originally brought by University Loft Co. under the “qui tam” or “whistleblower” provisions of the False Claims Act. The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct.  
   The False Claims Act also allows the whistleblower to receive a share of any funds recovered through the lawsuit.  University Loft will receive $2.25 million as its share of the settlement, the Justice Department said.