Importers Settle False Claims Act Suit for $3 Million

March 2nd, 2016 by Qui Tam

Ameri-Source International, Inc.; Ameri-Source Specialty Products, Inc.; Ameri-Source Holdings, Inc. and SMC Machining, LLC are Pennsylvania-based importers.  Arjay Goel and Thomas Diener owned the first three companies while SMC Machining, Inc. was incorporated at Goel’s direction.  The businesses and Goel and Diener were named as defendants in a False Claims Act lawsuit alleging that that they had schemed to avoid customs duties for the import of small-diameter graphic electrodes which were manufactured in the Peoples Republic of China.  These electrodes are used as fuel in electric arc and ladle furnaces, such as those utilized in steel-making.

The government imposes what are known as antidumping duties to protect domestic manufacturers from foreign companies who import goods into the country at below cost prices.  Imports of small-diameter graphite electrodes that are made in the Peoples Republic of China have been subject to antidumping duties since August 21, 2008.  Custom duties are not charged for large-diameter electrodes.

The lawsuit, which was originally brought by whistleblower Graphite Electrode Sales, Inc., claimed that between December of 2009 and March of 2012, Ameri-Source International, Inc. evaded duties on 15 shipments of small-diameter graphite electrodes from the Peoples Republic of China by claiming that they were large-diameter electrodes.  Goel, Diener and the other companies were said to have taken part in the misrepresentations.  All of the defendants named in the suit have agreed to pay $3 million to settle the claims that were brought against them.  This money will be applied to the lost antidumping duties that amount to $2,137,420.  Graphite Electrode Sales, Inc. will receive approximately $480,000 as its share of the settlement.

Ameri-Source International also pled guilty to two counts of smuggling goods into the United States.  It was ordered to pay a $250,000 fine.

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