New York Packaging II LLC, doing business as Redi-Bag USA, and its CEO Jeffrey Rabiea have agreed to pay $7.3 million to resolve allegations that they violated the False Claims Act by misrepresenting the country of origin of polyethylene retail carrier bags on customs forms, thereby evading antidumping duties owed to the United States, according to a Feb. 23 announcement by U.S. Attorney Robert Frazer.
“Antidumping duties help protect American taxpayers, workers, and businesses. This settlement agreement shows that our Office will continue to vigorously investigate and pursue allegations that businesses are evading those duties through unlawful conduct,” said Frazer.
The case centered on claims that Redi-Bag USA and Rabiea knowingly imported bags manufactured in China but falsely declared Hong Kong as their country of origin on customs entry forms. By doing so, they allegedly avoided paying antidumping duties imposed under Antidumping Duty Order No. A-570-886, which could reach up to 77.57% of the value of such goods from China. The United States alleged further concealment efforts including covering or removing “Made in China” markings and canceling orders set for customs inspection.
Assistant Attorney General Brett A. Shumate said, “Companies that benefit from access to U.S. markets must follow U.S. law, including by paying import duties that protect American manufacturers and workers from unfair foreign competition… The Justice Department will hold accountable those who evade duties owed to the United States.” CBP Commissioner Rodney S. Scott added, “With this settlement, we are protecting the integrity of our nation’s borders and holding those who attempt to evade customs duties accountable.”
The settlement resolves a civil lawsuit filed under the whistleblower provision of the False Claims Act by John Maierhoffer, a former contracted sales representative for Redi-Bag USA; he will receive approximately $1,332,250 from the proceeds.
This resolution follows recent federal initiatives such as launching task forces aimed at combating fraud related to trade practices affecting federal programs and national security interests within domestic industries.
The matter was handled through coordination between several agencies including offices within U.S. Customs and Border Protection (CBP) and attorneys with both the District of New Jersey—whose alumni include federal judges and senators—and Department of Justice Civil Division’s Commercial Litigation Branch according to the official website. The office is part of the Department of Justice; it prosecutes federal crimes statewide with about 170 staff members based in Newark, Trenton, and Camden; it also advances community safety through law enforcement coordination efforts.