Patio Furniture Company Grosfillex Inc. to Pay $4.9 Million to Resolve Allegations it Evaded Duties on Extruded Aluminum from the PRC

The Justice Department announced today that Grosfillex Inc. (Grosfillex), a patio furniture company located in Pennsylvania, has agreed to pay $4.9 million to resolve allegations that it violated the False Claims Act and other statutes by evading antidumping and countervailing duties (AD/CVD) on items made of extruded aluminum originating from the People’s Republic of China (PRC).

The Department of Commerce assesses, and U.S. Customs and Border Protection (CBP) collects, antidumping and countervailing duties (AD/CVD) to level the playing field for domestic producers. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. The settlement announced today resolves allegations that Grosfillex knowingly submitted, and caused to be submitted, false customs forms to CBP claiming that certain furniture parts made of extruded aluminum were not subject to AD/CVD. For a subset of such parts, the United States alleged that Grosfillex attempted to camouflage the aluminum extrusions by packaging the parts as sham furniture “kits.” In addition, for a different subset of such parts, Grosfillex knowingly failed to correct customs forms it had submitted previously, even after learning that the forms falsely stated to CBP that certain extruded aluminum parts were not subject to AD/CVD.

“Antidumping and countervailing duties protect American companies from unfair subsidies and trade practices that harm domestic industries,” said Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Justice Department will continue to actively pursue those who knowingly fail to pay customs duties.”

“This settlement should serve as a warning that the United States Attorney’s Office for the Eastern District of Pennsylvania will use every tool available to combat fraud in international trade,” said U.S. Attorney David Metcalf for the Eastern District of Pennsylvania. “We will pursue those who seek an unfair advantage in U.S. markets by attempting to evade paying the customs, duties, or tariffs on foreign imports meant to level the playing field for U.S. manufacturers.”

“The investigation into Grosfillex Inc. highlights our relentless dedication to enforcing our nation's trade laws and protecting the integrity of our economy. By uncovering and dismantling intricate schemes to defraud the government, we ensure that all businesses operate on a fair and level playing field,” said Special Agent in Charge Edward V. Owens of Homeland Security Investigations (HSI) at the Philadelphia office of U.S. Immigration and Customs Enforcement. “The successful settlement of this case is a testament to the outstanding collaboration between HSI, CBP and the U.S. Department of Justice. We remain vigilant in our efforts to identify and hold accountable those who attempt to exploit our trade system for their benefit.”

The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by Edward Wisner, a former employee of Grosfillex. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. Wisner will receive a $962,662.74 share of today’s settlement.

The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, with assistance from CBP.

Trial Attorney Nelson Wagner in the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Mark Sherer for the Eastern District of Pennsylvania handled the matter.

The pursuit of this matter illustrates the government’s emphasis on combating fraud, waste, and abuse. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential customs fraud can be reported to CBP at www.help.cbp.gov/s/tip.

The claims resolved by the settlement are allegations only and there has been no determination of liability.