Plastic Bag Importer Pays $7.3 Million to Settle False Claims Allegations
US producers of plastic grocery and shopping bags are acknowledging a $7.3 million settlement. The resolution addresses allegations of evading antidumping duties through misrepresentation of origin.
The U.S. Department of Justice announced that New York Packaging II LLC, doing business as Redi-Bag USA, and its CEO, Jeffrey Rabiea, have agreed to pay $7.3 million to resolve allegations under the False Claims Act. The company is accused of misrepresenting the country of origin for imported polyethylene retail carrier bags to evade antidumping duties owed to the United States.
The lawsuit alleged that the defendants knew certain bags were manufactured in China but listed Hong Kong as the country of origin on customs forms. This misrepresentation allowed them to avoid paying the applicable 77.57 percent antidumping duty.
Antidumping orders are currently in place for plastic bags from China, Indonesia, Malaysia, Taiwan, Thailand, and Vietnam. These duties are intended to offset unfair competitive advantages enjoyed by foreign exporters selling goods in the U.S. at less than fair value, thereby protecting domestic manufacturers and workers.
The settlement with Redi-Bag USA and Mr. Rabiea resolves a civil lawsuit initiated by a former contracted sales representative for Redi-Bag USA under the whistleblower provision of the False Claims Act. This provision allows private parties to sue on behalf of the U.S. and share in the government's recovery. The whistleblower is set to receive approximately $1.3 million from the settlement proceeds.