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.

Labor Department News Releases Update

Labor Department News Releases Update

Labor Department News Releases Update

Labor Department News Releases Update

AIRLINE TO PAY $2.8 MILLION TO SETTLE ALLEGATIONS OF FAA VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, December 21, 2015

Southwest Airlines Agrees to Pay $2.8 Million to Settle Action Alleging Federal Aviation Administration Safety Violations

Southwest Airlines Co. (Southwest) and the United States settled a lawsuit involving allegations that Southwest violated Federal Aviation Administration (FAA) safety regulations in its maintenance of its Boeing 737s, as well as other pending administrative matters, announced the Department of Justice.  The settlement requires operational changes by Southwest designed to enhance its oversight of and control over third parties that perform maintenance on Southwest aircraft.  Southwest also agreed to pay a $2.8 million civil penalty and up to $5.5 million in deferred civil penalties if it does not implement the operational changes set forth in the settlement agreement.

“The Justice Department believes the settlement agreement with Southwest Airlines Co. will provide meaningful improvements in safety and compliance and further ensure the integrity of FAA air safety regulations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

“Safety depends on compliance with our regulations,” said FAA Administrator Michael Huerta.  “This agreement provides strong incentives for Southwest to take specific steps to address the compliance problems that the FAA investigations uncovered.”

This case was handled by the Civil Division’s Federal Programs Branch, with the assistance of the U.S. Attorney’s Office of the Western District of Washington, the FAA’s Office of General Counsel and the FAA’s Northwest Mountain Region.

The lawsuit is captioned United States v. Southwest Airlines Co., 14-cv-1693-JCC (W.D. Wa.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

CHEMICAL DISTRIBUTOR TO PAY $1.5 MILLION FOR ILLEGAL STORAGE AND TRANSPORT OF HAZARDOUS WASTE

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, December 22, 2015

Roanoke Chemical Distributor, Chem-Solv Inc., Pleads Guilty to Illegally Storing and Transporting Hazardous Waste and Agrees to Pay $1.5 Million in Penalties

Chem-Solv Inc. (Chem-Solv), formerly known as Chemicals & Solvents Inc., pleaded guilty today to illegally storing hazardous waste at its facility in Roanoke, Virginia, and to illegally transporting hazardous waste from that facility to another location, Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney John P. Fishwick of the Western District of Virginia announced today.

As a part of the plea agreement, Chem-Solv has agreed to pay a $1 million criminal fine for these violations, as well as an additional $250,000 to fund environmental community service projects.  Chem-Solv has agreed to serve five years’ probation, during which time it must develop and implement an environmental compliance plan and be subjected to yearly independent environmental audits.  In conjunction with the criminal settlement, the U.S. Environmental Protection Agency has reached a civil settlement with Chem-Solv that requires the company to pay a $250,000 penalty to settle alleged violations of improper hazardous waste storage at Chem-Solv’s Roanoke facility.

Chem-Solv operates a chemical blending and distribution facility on Industry Avenue S.E. in Roanoke as well as distribution facilities in Colonial Heights, Virginia, Rock Hill, South Carolina, and Piney Flats, Tennessee.  Chem-Solv is in the business of purchasing chemicals and then reselling them to customers, either directly or after repackaging.  As part of its ordinary business practices, Chem-Solv generated hazardous waste.  A hazardous waste is waste which, because of its designation, quantity, concentration, or characteristics, poses a substantial present or potential hazard to human health or the environment.

Count one of the information is based on a spill of several hundred gallons of ferric chloride – a hazardous substance – on the Chem-Solv facility in Roanoke in June 2012.  Although most of the waste was cleaned up using vacuum trucks, some of the ferric chloride flowed from the Chem-Solv facility onto an adjoining property both before, and during, the cleanup.  The pleadings allege that the adjoining property owner was not notified that ferric chloride had leaked onto their property.  Chem-Solv then employed a waste transportation company to transport the waste to a disposal facility.  Hazardous waste may only be transported by permitted carriers, and it must be properly placarded and be accompanied by a hazardous waste manifest identifying the waste and its characteristics.  The pleadings allege that, although Chem-Solv was aware of the hazardous nature of ferric chloride, it did not properly test the waste and instructed the transporter to transport the waste as non-hazardous, without the proper placards and manifests.

Count two of the information charges Chem-Solv with the improper storage of hazardous waste.  Chem-Solv was given advance notice of an EPA inspection in December 2013.  At the time the advance notice was given, Chem-Solv was storing numerous containers of chemical waste on its facility that should have been disposed of properly.  The pleadings allege that Chem-Solv directed its employees to load three trailers with the chemical waste in an attempt to prevent EPA inspectors from discovering it.  Two of the three trailers were taken offsite.  The third trailer, which was not road worthy, was stored on the Chem-Solv property for almost a year and its contents were discovered by law enforcement officers on Nov. 19, 2014, while executing a search warrant.  That trailer was found to contain hazardous waste that Chem-Solv did not have a permit to store on its facility.

“With this plea agreement, Chem-Solv has an opportunity to put its egregious conduct behind it and learn from these mistakes by developing a strong environmental compliance plan, as required,” said Assistant Attorney General Cruden.  “The Justice Department and our federal partners will continue to investigate and prosecute anyone whose illegal conduct puts workers and the public at risk of harm from hazardous and toxic materials.”

“A corporation’s concern with the bottom line profit can cause it to cut corners by attempting to circumvent laws that are intended to protect the community and the environment,” said U.S. Attorney Fishwick.  “The prosecution of Chem-Solv should send a strong message that such corporate actions will not be tolerated and will be punished.”

“The chemicals in this case are toxic, highly corrosive and acidic, and today’s plea demonstrates that when companies put the public at serious risk, they will be held accountable for their actions,” said Assistant Special Agent in Charge Jennifer Lynn of EPA’s criminal enforcement program in Virginia.

“The guilty plea entered today by Chem-Solv for illegally storing and transporting hazardous waste is a clear signal to those that would seek to circumvent or disregard transportation-related laws and regulations that there are serious repercussions for doing so,” said Regional Special Agent in Charge William Swallow of the U.S. Department of Transportation Office of Inspector General.

The investigation was conducted by Special Agents of EPA’s Criminal Investigation Division and the U.S. Department of Transportation’s Office of Inspector General.  Assistance in the investigation was provided by the Virginia Department of Environmental Quality, Roanoke City Police Department and the Roanoke Fire-EMS Department and the Blue Ridge Environmental Task Force.  The prosecution was handled by Assistant U.S. Attorney Jennie L. M. Waering, Senior Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section, and EPA Regional Criminal Enforcement Counsel David Lastra.

OFCCP Sues Convergys for Refusing to Comply with Investigation of Employment Practices

OFCCP Sues Convergys for Refusing to Comply with Investigation of Employment Practices