Mark A. Strauss Law PLLC Announces $3.64 Million Settlement of Customs-Fraud Qui Tam Whistleblower Lawsuit

NEW YORK–(BUSINESS WIRE)–Mark A. Strauss Law, PLLC, a whistleblower law firm, announced today a $3.64 million False Claims Act settlement with apparel importer Luchiano Visconti Loutie, LLC, of East Rockaway, N.Y., in connection with allegations relating to the falsification of customs documentation and the evasion of import duties on apparel imports from Turkey and China. The qui tam whistleblower—a client of Mark A. Strauss Law, PLLC—will receive a whistleblower award of 20% of the settlement proceeds.

Luchiano—an importer and wholesaler of luxury menswear—admitted in connection with the settlement that it regularly provided its customs brokers with information and documentation, including commercial invoices, that significantly understated the value and prices paid for the apparel it imported. In some instances, Luchiano changed invoices provided by its suppliers before providing them to its customs brokers. In other instances, the suppliers transmitted invoices that Luchiano knew or had reason to know did not reflect the actual prices it paid for the goods.

Luchiano also admitted that, through its customs brokers, it significantly underreported the value of its imports on entry documents filed with U.S. Customs and Border Protection (CBP) and thereby routinely underpaid customs duties. From December 2013 to August 2019, it did not pay over $1.8 million in customs duties that it was obligated to pay on its imports.

The whistleblower—a citizen of Turkey and an executive at one of Luchiano’s Turkish apparel suppliers—filed the qui tam lawsuit in December 2018 after discovering the fraud through his firm’s commercial dealings with Luchiano. He will receive a whistleblower award—referred to under the False Claims Act as “relator’s share”—of approximately $728,000 from the proceeds of the settlement.

The settlement exemplifies the partnership between qui tam whistleblowers and the U.S. Department of Justice (DOJ), which has made clear that it is committed to fighting customs fraud, and that whistleblowers are vital to that effort. Import-duty evasion not only harms the public fisc but also unfairly disadvantages law-abiding importers.

“Evidence suggests that customs fraud is rampant,” whistleblower attorney Mark A. Strauss said. “Whistleblowers like our client in this case play an important role in levelling the playing field for honest importers who responsibly declare and pay the duties they owe. We believe that similar import-duty evasion schemes are proliferating as importers attempt to avoid the significant tariffs on Chinese imports under Section 301 as well as the new tariffs being imposed on imports from Russia.”

“Whether the customs-fraud scheme in question involves undervaluation, as in this case, or other types of frauds, such as the transshipment of goods through third countries while misdeclaring their country of origin, or the use of improper Harmonized Tariff Schedule (HTS) classifications to avoid higher duty rates, the qui tam provisions of the False Claims Act provide a powerful incentive for whistleblowers to expose this type of wrongdoing,” whistleblower attorney Mark A. Strauss added.

Customs fraud violates the False Claims Act, which imposes substantial liabilities on parties who knowingly overcharge or underpay the U.S. government or its agencies like CBP. The False Claims Act’s qui tam provisions authorize private parties—called “relators” or whistleblowers—to sue on behalf of the U.S. government and share in the proceeds. Qui tam whistleblowers under the False Claims Act—who do not have to be American citizens, as the Luchiano case demonstrates—are entitled to awards of 15-30% of any recovery.

About Mark A. Strauss Law, PLLC

Whistleblower law firm Mark A. Strauss Law, PLLC, represents qui tam relators under the False Claims Act and other United States whistleblower statutes and programs. Its founder, Mark A. Strauss, has more than twenty years of experience in complex civil anti-fraud litigation, and has successfully represented qui tam whistleblowers under the False Claims Act as well as victims of financial fraud under the federal securities laws. His efforts have resulted in the recovery of hundreds of millions of dollars.

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Contacts

Mark A. Strauss

[email protected]
Mark A. Strauss Law, PLLC

+1 (212) 729-9496