Kirby McInerney LLP Announces $3.85 Million Settlement of Whistleblower Case Against Jewelry Importers Engaged in Customs Fraud Scheme09/01/2011
NEW YORK, September 1, 2011 - Kirby McInerney LLP today has announced the $3.85 million settlement of a whistleblower lawsuit relating to a decade-long customs fraud scheme conducted by a Hong-Kong based jewelry manufacturer and its affiliates. The action was filed by Kirby McInerney under the False Claims Act on behalf of its client, a whistleblower who learned about the fraudulent conduct. Under the False Claims Act, private parties who have knowledge of fraud committed against the government can file a fraud complaint on behalf of the United States and then share in the recovery. In this action, the whistleblower will receive approximately 19% of the $3.85 million settlement.
The whistleblower’s complaint alleged that Noble Jewelry Ltd., an international jewelry company based in Hong Kong, and certain New York affiliates, were engaged in a scheme involving the submission of false customs declarations and bogus invoices with respect to shipments of jewelry. The false documents under-reported the value of the imported goods, thereby cheating the government of customs duties. The defendants also maintained separate invoices reflecting the goods' correct value.
The Manhattan U.S. Attorney’s Office and the Office of U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations conducted an extensive investigation of the claims in the whistleblower’s complaint. On August 31, 2011, the United States announced that it had intervened in the whistleblower’s case, filed its own civil complaint and entered into a settlement with the defendants requiring them to pay $3.85 million plus interest in damages and penalties under the False Claims Act.
“Our client was very courageous in bringing this fraud to the attention of the government through his lawsuit,” said Kirby McInerney partner Mark Strauss. “He went to bat for the taxpayers who were getting ripped off, at a time when every penny counts.”
The Manhattan U.S. Attorney’s Office’s August 31, 2011 press release quoted Manhattan U.S. Attorney Preet Bharara as stating: “This case is an excellent example of the essential public service a whistle-blower can perform by partnering with the government to expose illegal conduct that adversely affects the public fisc. It is also a reminder of our continued vigilance in pursuit of fraud and its perpetrators.”