Multinational Industrial Engineering Company to Pay $22 Million to Settle False Claims Act Allegations of Evading Customs Duties | USAO-EDPA

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams and Acting Assistant Attorney General Jeffrey Bossert Clark announced that Linde GmbH and its U.S. subsidiary Linde Engineering North America LLC (LENA) (together, “Linde”) have agreed to pay the United States more than $22.2 million to resolve allegations that Linde violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying duties owed on the companies’ imports.

Linde GmbH is a multinational corporation headquartered in Germany that, among other things, imports materials into the United States for use in the construction of natural gas and chemical plants. LENA, based in Houston, conducted portions of Linde’s United States business and managed procurement and logistics for Linde. Between 2011 and 2017, Linde imported more than $500 million in goods into the United States.

To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are covered by antidumping or countervailing duties, and the amount of duties owed. U.S. Customs and Border Protection (CBP) relies on these representations to determine the correct amount of any duties owed. It is the importer’s affirmative duty to use “reasonable care” to make sure that such information is accurate so that CBP can assess the proper duties.

The United States alleged that, between 2011 and 2017, Linde avoided duties owed to the United States, including in some instances antidumping and countervailing duties, by misrepresenting the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements.

“Trade policy is a critical part of our nation’s foreign policy,” said First Assistant U.S. Attorney Jennifer Arbittier Williams. “Anti-dumping and countervailing duties ensure that American manufacturers are protected from unfair trade practices, and valuation requirements help to ensure that importers do not have an incentive to use foreign engineers to design or inspect the equipment instead of hiring in the United States.”

“This settlement reflects our commitment to hold accountable those who evade duties owed on imported goods, including antidumping and countervailing duties that level the playing field for U.S. manufacturers,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by bringing underpriced goods into this country.”  

“CBP is proud to work with the Department of Justice to enforce our trade laws. Collecting revenue on behalf of the American people is something we take very seriously,” said Brenda Smith, Executive Assistant Commissioner, CBP Office of Trade. “We are glad to have come to an equitable and productive solution.” 

Prior to the United States’ disclosure to Linde of its investigation, Linde initiated a voluntary disclosure to CBP regarding its importing practices. Since that time, Linde has cooperated with the investigation and worked to overhaul and improve its customs compliance program.

First Assistant U.S. Attorney Williams praised Linde’s work in addressing the issues in these programs: “We commend Linde for coming forward with these issues and working to ensure both that the government is made whole and that these issues will not recur. We hope this settlement will serve as a message to other importers to ensure that they have compliance processes in place that can detect problems before they grow. Importers have an obligation to scrutinize their practices and promptly report issues if they discover that they have not lived up to their obligations.” 

The settlement with Linde resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Pennsylvania and is captioned United States ex rel. Johnson v. Linde AG, et al., No. 17-cv-1012. As part of today’s resolution, Ms. Johnson will receive approximately $3.7 million. The qui tam complaint was filed by Stephen Hasegawa of Phillips & Cohen in San Francisco.

“We thank the relator and relator’s counsel for their contributions to this case. Without information from citizens like the relator, detecting fraud and conserving government program funds would be much more difficult,” said First Assistant U.S. Attorney Williams.

The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from CBP’s Office of Chief Counsel and CBP’s Regulatory Audit and Agency Advisory Services. Assistant United States Attorneys Paul W. Kaufman and Landon Y. Jones III of the Eastern District of Pennsylvania and trial attorney Jennifer Chorpening of the Civil Frauds section of the Department of Justice handled the investigation and settlement.

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

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