FEDERAL COURT ORDERS STONE IMPORTER TO PAY PAYROLL TAXES AS THEY BECOME DUE

FROM:  U.S. JUSTICE DEPARTMENT  

Monday, January 4, 2016

Court Permanently Enjoins Baltimore-Area Importer of Stone From Accruing Payroll Tax Liabilities

A federal court has ordered a Baltimore-area importer of marble and granite to pay its payroll taxes as they become due, the Justice Department announced today.  Judge Ellen L. Hollander of the U.S. District Court for the District of Maryland entered a permanent injunction requiring Alexander Stone Inc. d/b/a MMG Marble & Granite and its owners, Soultana Efthimiadis and Kyriakos Efthimiadis, to pay their federal payroll tax liabilities as they became due and owing.

According to the United States’ complaint, Alexander Stone has repeatedly failed to make timely and adequate federal employment tax deposits since 2008 and has amassed substantial employment tax liabilities.  The defendants agreed to entry of the injunction but did not admit or deny the substance of the allegations in the United States’ civil complaint.

Under the terms of the injunction, the business must deposit its payroll taxes and file its employment tax returns on a timely basis.  The defendants are also required to notify the Internal Revenue Service (IRS) that the requisite tax deposits have been made and tell the IRS if they begin operating any new business.  The defendants are precluded from assigning property or making any payments to other creditors until the employment tax and withholding liabilities are paid.  The injunction is effective immediately and will ensure that Alexander Stone stays current on its federal employment tax obligations.  Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division thanked IRS Field Collection and its revenue officer for investigating and preparing the civil case.

IMPORTER TO PAY $15 MILLION TO SETTLE CASE INVOLVING ALLEGED EVASION OF CUSTOMS DUTIES

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, December 21, 2015

Texas-Based Importers Agree to Pay $15 Million to Settle False Claims Act Suit for Alleged Evasion of Customs Duties

The Department of Justice announced today that University Furnishings LP and its general partner, Freedom Furniture Group Inc. (collectively University Furnishings) agreed to pay $15 million to resolve a lawsuit brought under the False Claims Act alleging that the companies made or conspired with others to make false statements to avoid paying duties on wooden bedroom furniture imported from the People’s Republic of China.  Texas-based University Furnishings sells furniture for student housing.

“Those who introduce goods into the United States must comply with the law, including the payment of customs duties meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by evading the duties owed on goods imported into this country.”

The government alleged that between 2009 and mid-2012, University Furnishings knowingly misclassified or conspired with others to misclassify wooden bedroom furniture on documents presented to U.S. Customs and Border Protection (CBP) to avoid paying antidumping duties on imports of wooden bedroom furniture manufactured in the People’s Republic of China.  Specifically, University Furnishings allegedly classified the furniture as office and other types of furniture not subject to duties while selling the furniture in the student housing market for use in dormitory bedrooms.  The Department of Commerce assesses and CBP collects antidumping duties to protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.  

“Companies that cheat, by fraudulently mislabeling their imports, undermine U.S. manufacturers and others that obey the rules, and hurt consumers and taxpayers,” said U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas.  “We are hopeful that today’s settlement will help deter others from this type of scheme.”

The allegations resolved by the settlement were originally brought by University Loft Company under the qui tam or whistleblower provisions of the False Claims Act.  The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct.  The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit.  University Loft Company will receive $2.25 million as its share of the settlement.

The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Texas, CBP’s Office of Field Operations, Office of Regulatory Audit and Office of Chief Counsel; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

The lawsuit is captioned United States ex rel. University Loft Company v. University Furnishings, LP, et al., No. A13-CV-678 (W.D. Tex.).  The claims resolved by this settlement are allegations only; there has been no determination of liability.