The U.S. Department of Justice (DOJ) has announced that Evolutions Flooring Inc., a U.S. importer of multilayered wood flooring, and its owners have agreed to pay $8.1 million to resolve allegations under the False Claims Act (FCA). The company was accused of evading customs duties on imports from the People's Republic of China (PRC).
The settlement follows a qui tam whistleblower lawsuit filed by Urban Global LLC, which will receive $1.2 million from the settlement amount. According to the DOJ, Evolutions Flooring, directed by its owners Lin and Qian, evaded antidumping, countervailing, and Section 301 duties between 1 September 2019 and 31 July 2022. The company allegedly provided false information to U.S. Customs and Border Protection regarding the origin and manufacturer of the imported flooring.
Acting Assistant Attorney General Yaakov M. Roth emphasised that import duties are vital for government revenue and maintaining fair competition for U.S. manufacturers, stating, 'The department will pursue those who seek an unfair advantage in U.S. markets, including by evading the duties owed on goods imported into this country from China.'
The FCA's qui tam provisions allow private citizens to sue on behalf of the government when they have evidence of fraud, with whistleblowers entitled to between 15% and 30% of the recovered funds. In the 2024 fiscal year, FCA settlements and judgments totalled over $2.9 billion, with more than $2.4 billion originating from qui tam lawsuits. A record 979 such lawsuits were filed that year.
However, a recent ruling by a Florida district judge declared the FCA's qui tam provisions unconstitutional. The federal government has appealed the decision, stressing that all other courts have upheld the provisions' constitutionality.
The allegations against Evolutions Flooring remain unproven, with no determination of liability.
Source: www.whistleblowersblog.org