The U.S. Department of Justice has filed a complaint against a Company and its network of suppliers, alleging violations of the False Claims Act. Specifically, the DOJ claims that the Company engaged in a long-standing scheme to undervalue imports from China by submitting a false set of invoices to the government. A third-party auditor also informed the Company that it needed to reassess its duty calculations and pricing arrangements. By undervaluing imports, a company can pay less in customs duties but may face lawsuits under the FCA for making false statements to evade paying the government. This could result in treble damages and penalties for each “false” entry. Neither “everyone does it” nor “we are being unfairly singled out” constitutes a valid legal defense.
