UK Retailer Settles Whistleblower Suit on Split Shipments Under de Minimis Limits

A U.K. retailer, and its chief executive, that allegedly split shipments to avoid duties settled a whistleblower lawsuit against the company for about $900,000, the Justice Department said in a news release. The company, Pure Collection, and its CEO Samantha Harrison were said to separate single orders exceeding the de minimis value threshold into multiple smaller parcels in order to evade customs duties on imports over the de minimis level (see 1709080037). "This Settlement Agreement is neither an admission of liability by Pure nor a concession by the United States that its claims are not well founded," the parties said in the court filing.

The Justice Department agreed to join the suit last year after it was filed with a Maine federal court. "The settlements resolve allegations that Pure and Harrison improperly avoided U.S. customs duties owed on merchandise shipped from the United Kingdom to U.S. customers, including many customers in Maine," DOJ said. Whistleblower Andrew Patrick will get 18 percent of the total settlement amount, said law firm Constantine Cannon, which represented him, in a news release. Pure didn't immediately comment.

Specifically, the company allegedly "improperly and knowingly concealed and avoided Customs duties applicable to the knitwear and other items Pure regularly shipped from the United Kingdom directly to its thousands of U.S. customers, including those in Maine, from 2007 through 2017," according to the settlement agreement. Qui tam, or whistleblower, provisions allow "private individuals who have knowledge of fraud committed against the government to file lawsuits on the government’s behalf," DOJ said.

The lawsuit was somewhat unique in that Patrick is a U.K. resident who worked for the company in the U.K., Constantine said. "Mr. Patrick is the first British whistleblower to expose a UK company for evading U.S. import duties and only the second to receive a financial reward under the whistleblower provisions of the False Claims Act,” said Mary Inman, a lawyer with Constantine Cannon. “As global business expands, European whistleblowers like Mr. Patrick play an increasingly vital role in alerting the U.S. Government to fraud schemes that cross international borders.”

Email ITTNews@warren-news.com for copies of the court filings.