Company Executive, Part-Owner to Pay $415,000 to Settle Customs Fraud Lawsuit

The president and part-owner of a jewelry importer will pay $415,000 to settle a False Claims Act lawsuit that alleged his company undervalued entries in an effort to avoid paying duties, the Department of Justice said in an Aug. 3 news release. Anshul Gandhi, resident of New Jersey, admitted as part of the settlement that he knew of the customs fraud, avoiding a more than $7 million judgment entered in New York Southern District federal court that same day.

The whistleblower suit against Gandhi and his company, Anaya Gems, was brought by Boaz Hirshberg, a former employee. Hirshberg’s portion of the settlement will be the subject of a separate agreement, the settlement said. The case docket still appears to be sealed, according to a search of the district court’s online records.

According to a government complaint filed July 30, Anaya would have diamonds shipped from India-based affiliates to manufacturers in Thailand and Hong Kong, who didn’t own the diamonds and did not include their value in the price charged to Anaya. When the jewelry was imported into the U.S., the value of the diamonds was either understated or completely omitted from the total customs value on entry documentation. Over a seven-year period, Anaya avoided paying millions of dollars in duties, the complaint said.

Anaya’s own online records listed the value provided to the customs broker and declared to CBP separately from the actual cost of the jewelry, including the diamonds. That latter value was used by Gandhi to set prices for sale in the U.S. to major retailers, including Zales Jewelers, Sterling Jewelers, Walmart and J.C. Penney, the complaint said. Anaya has since declared bankruptcy, and no longer exists after having been sold off in receivership.

Under the settlement, Gandhi admitted that he “knew the invoices used by Anaya Gems’ customs broker to record the value of the merchandise declared on the entry summary forms did not include the full value of the diamonds contained in the jewelry,” the agreement that he signed said. “Gandhi was aware that Anaya Gems did not accurately report the value, and that this resulted in underpayment of customs duties.”

After a review of Gandhi’s finances, the government agreed that Gandhi will pay $415,000 in eight installments, with the first three totaling $200,000 plus interest in September, November and December of 2020, followed by payments of $30,000 to $50,000 annually through 2025. As long as he meets the terms of the settlement, the government will not attempt to collect on a $7,860,000 judgment against Gandhi, the agreement said.