Vitamin Importer to Pay Over $22 Million to Settle Underpaid Customs Duties Charges

The U.S. Attorney's Office for the Southern District of New York opened and settled a case with vitamin and nutritional supplement importer International Vitamins Corp. (IVC) over the company's misclassification of its products to avoid paying customs duties, the U.S. Attorney's Office announced Jan. 30. IVC will pay $22.87 million to the U.S. and admit to its conduct. The government joined its lawsuit with a whistleblower action filed under seal pursuant to the False Claims Act, the U.S. Attorney's Office said.

From 2015 to 2019, the company used duty-free Harmonized Tariff Schedule subheadings for 32 of its products imported from China, even though the goods would have been subject to duties had they been correctly classified. IVC admitted that even after bringing on a consultant in 2018 who pointed out the errors, it continued to incorrectly classify the products for over nine months and did not pay back the duties that were unpaid due to the misclassification of the goods, the release said.

“IVC engaged in a fraudulent scheme to avoid customs duties owed to the United States by misclassifying many of its products as duty-free when importing them from China," U.S. Attorney Damian Williams said "Worse yet, IVC made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed. This Office is committed to combatting customs fraud by holding companies accountable when they attempt to avoid paying what they owe when importing goods from abroad."