Jewelry Importer Settles Whistleblower Suit on Customs Valuation, Smuggling

The Department of Justice and Temple St. Clair reached a $796,000 settlement to resolve allegations of civil fraud, the DOJ said in a news release. Temple St. Clair, "a fine jewelry designer, manufacturer, and importer based in New York, New York," was alleged to have undervalued its goods at import, the DOJ said. The company's senior leadership also allegedly carried jewelry, including a pendant valued at $83,000, into the U.S. for commercial purposes without declaration, the DOJ said. The lawsuit was initiated by a whistleblower under the False Claims Act, it said.

Specifically, Temple St. Clair between 2011 and 2016 underreported the value of jewelry from Italy, Sri Lanka and Thailand. During the same period, the company claimed duty-free treatment under the Generalized System of Preferences by misrepresenting to CBP that at least 35% of the jewelry's value was added in Sri Lanka or Thailand. Temple St. Clair also didn't add country of origin markings to the goods from Sri Lanka and Thailand and sold the jewelry in the U.S. "without markings identifying the country of origin, giving rise to a ten percent marking duty," the complaint said. The whistleblower suit was originally brought by a senior inventory manager at Temple St. Clair who prepared customs documentation for the company.

Temple St. Clair "admitted to and accepted responsibility for underpaying customs duties and failing to properly mark its merchandise, and agreed to pay $796,000 to the United States and implement corrective measures to prevent future customs violations," the DOJ said. Under the consent agreement, Temple St. Clair must properly mark its jewelry prior to import with the required country of origin information, it said. "This Office is committed to pursuing customs fraud and holding importers accountable for evading customs duties and disregarding CBP requirements," Manhattan U.S. Attorney Geoffrey Berman said.