Multinational to Pay More Than $22.2 Million to Settle Customs Fraud Whistleblower Suit

A multinational engineering company will pay more than $22.2 million to resolve a False Claims Act whistleblower lawsuit related to the evasion of customs and antidumping and countervailing duties. Germany-based Linde GmbH and its U.S. affiliate, Linde Engineering North America, allegedly misrepresented the nature, classification, and valuation of imported merchandise, as well as the applicability of free trade agreements, so as not to pay tariffs, the Department of Justice said in a Sept. 25 news release.

Crystal Johnson, a purchasing and logistics manager employed by Linde in Oklahoma for 10 years, filed the complaint, which was later joined by DOJ, law firm Phillips & Cohen, which represented her, said in a press release the same day. She will receive $3.7 million from the settlement for her efforts, DOJ said. “The settlement is one of the largest for a whistleblower case alleging avoidance of customs duties,” Phillips & Cohen said.

Linde, an importer of materials for use in the construction of natural gas and chemical plants, among other things, allegedly evaded the duties between 2011 and 2017. According to Phillips & Cohen, Linde submitted invoices and entry forms to CBP with incorrect tariff schedule codes, and failed to report assists in the value of its imported goods. “For instance, the whistleblower complaint says that Linde described stainless steel pipes from China as carbon steel pipes, which have a lower tariff and no AD/CVD duties. This saved the company millions of dollars,” the law firm said.

Johnson filed her False Claims Act suit in 2017. Prior to that, Linde had filed a voluntary self-disclosure in 2016 that it had underpaid customs duties. But Linde did not disclose the full amount of how much it owed until after Johnson filed suit, when it paid $13 million in 2017. Linde paid another $2 million in 2019 after the government notified it that it was investigating Linde for the underpayments, prompted by Johnson’s lawsuit, Phillips & Cohen said. The $15 million already paid by Linde is included in the $22.28 million settlement.

“The claims resolved by the settlement are allegations only, and there has been no determination of liability,” DOJ said. Linde did not comment by our deadline.

“We commend Linde for coming forward with these issues and working to ensure both that the government is made whole and that these issues will not recur,” said First Assistant U.S. Attorney Jennifer Williams from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, which handled the case. “We hope this settlement will serve as a message to other importers to ensure that they have compliance processes in place that can detect problems before they grow. Importers have an obligation to scrutinize their practices and promptly report issues if they discover that they have not lived up to their obligations.”