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On April 9, 2014, the US Attorney’s Office for the SDNY settled a Customs Fraud civil Qui Tam case under the False Claims Act against Dana Kay for $10 million. According to the government, DANA KAY, INC. and SIOUNI & ZAR CORPORATION tried to avoid paying the correct amount of customs duties by using phony invoices that understated the value of imported clothing apparel. The government alleged the defendants paid one amount to their overseas manufacturers but they then deducted a flat fee of $2.50 per garment set before calculating the duty owed on the apparel. The defendants recorded only the lower value on entry forms presented to Customs. By doing this, the defendants illegally  sought to save millions of dollars in Customs Duties.

This Customs Fraud matter is known as a Reverse False Claim case under the False Claims Act. The whistleblower (an employee of the defendants) who brought the case will receive $2.3 million as his relator’s share.

Read more: http://www.justice.gov/usao/nys/pressreleases/April14/DanaKayandSiouniandZarSettlementPR.php