Quartz Import Settlement: $12.5 Million
DALLAS – A supplier of countertop and cabinetry products, along with its president, will pay $12.4 million to resolve in a federal case involving alleged evasion of unfair-trade duties with quartz surfaces from China.
The U.S. Attorney’s Office for the Northern District of Texas stated Aug. 19 that Allied Stone Inc. of Dallas and Allied President Jia “Jerry” Lim agreed to resolve a November 2021 civil action claiming violations under the federal False Claims Act.
The settlement resolves allegations that Allied Stone and Lim knowingly evaded or conspired to evade duties on Chinese quartz surface products that were imported between Sept. 29, 2018 and Feb. 7, 2023.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The settlement stems from a civil lawsuit filed in November 2021 by Melinda Hemphill, a former Allied employee. The legal action came under the whistleblower provision of the False Claims Act that permits private parties to file suit on behalf of the United States for false claims, and to share in a portion of the government’s recovery.
The 2021 lawsuit, unsealed from federal-court records with announcement of the settlement, detailed alleged incomplete labeling of quartz-surface shipments to not reveal product origins, and a lack of cooperation when Hemphill attempted to ascertain shipment details.
Hemphill worked for Allied from 2019 through mid-2020. Her two decades of experience in the construction industry also included supply-chain jobs in Texas; one of those employers alleged that Allied won bids on projects by selling quartz-surfaces for less than the competitor could purchase the product.
Hemphill’s lawsuit cited details from two multifamily construction projects in the Dallas area in 2019-2020, where she attempted to track down information on crates of quartz-surface precut parts supplied by Allied.
As part of the resolution of the 2021 lawsuit, Hemphill will receive approximately $2,170,875 of the settlement proceeds.
“This settlement reflects our commitment to hold accountable those who evade or conspire to evade duties owed on imported goods, including antidumping and countervailing duties that level the playing field for American manufacturers,” said Assistant Attorney General Brett A. Shumate 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 or conspiring with others to evade duties owed.”
Among other things, the United States alleged that Allied Stone and Mr. Lim misrepresented, caused to be misrepresented, or conspired in the misrepresentation of Chinese quartz surface products as other merchandise subject to lesser duties, such as marble or crystallized glass, to improperly avoid applicable antidumping and countervailing duties.
The United States also alleged that Allied Stone and Mr. Lim failed to declare and pay, and failed to ensure that others (including manufacturers and third-party entities serving as the official importers of record) were declaring and paying, applicable antidumping and countervailing duties owed to the United States on entries of Chinese quartz surface products.
“Providing false information to CBP violates the law, and it is imperative that violators face consequences,” said acting Executive Assistant Commissioner Susan S. Thomas of the Office of Trade, U.S. Customs and Border Protection. “CBP will always work alongside the Department of Justice to ensure a level playing field for U.S. businesses.”
The resolution obtained in this matter 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 Northern District of Texas, with assistance from CBP’s Office of Associate Chief Counsel, Gulf Southwest Region and from Trade Regulatory Audit within CBP’s Office of Trade.