Patio Furniture Firm Pays Millions for Dodging Import Duties

Patio Furniture Firm Pays Millions for Dodging Import Duties

Grosfillex Inc., a Pennsylvania-based patio furniture company, has agreed to pay $4.9 million to resolve allegations that it violated the False Claims Act (FCA) and other statutes by evading antidumping and countervailing duties (AD/CVD) on extruded aluminum products from China. The US Department of Commerce and US Customs and Border Protection (CBP) imposes these duties to protect domestic industries from unfair foreign trade practices, such as selling products below cost or benefiting from foreign government subsidies.

The government alleged that Grosfillex knowingly submitted false customs forms to CBP, misrepresenting that certain aluminum furniture parts were not subject to these duties. In some cases, the company allegedly disguised the aluminum parts as sham furniture “kits” to avoid detection. In other instances, it failed to correct previously submitted false information, even after learning that the forms falsely stated certain extruded aluminum parts were not subject to AD/CVD.

The settlement stems from a whistleblower lawsuit filed by Edward Wisner, a former Grosfillex employee. Wisner will receive nearly $1 million from the settlement.

Read the US Department of Justice’s (DOJ) press release here.

Q Link Wireless and Owner Pay $110 Million for FCA Fraud

Q Link Wireless LLC and its owner Issa Asad have agreed to pay over $110 million to resolve criminal and civil allegations that they violated the FCA by submitting fraudulent claims to the Federal Communications Commission’s (FCC) Lifeline Program. The Lifeline Program, established to help low-income consumers access telecommunications services, requires participating carriers to certify that their customers are actively using their subsidized phones.

Q Link and Asad were accused of orchestrating a scheme to submit false claims for customers who were not using their phones as required, including some who did not even possess activated devices. To conceal their actions and continue receiving monthly federal payments, they allegedly manufactured fake cellphone activity and provided fabricated records to the FCC, resulting in improper payments totaling over $38 million between February 2018 and October 2019.

Q Link and Asad pleaded guilty to charges of conspiracy to defraud the United States, based on allegations of wire fraud and theft of government funds. Additionally, Asad pleaded guilty to unrelated money laundering charges. They were sentenced on July 25, and Asad was ordered to serve a term of 60 months of incarceration. Q Link and Asad agreed to be barred from participating in any FCC-administered programs and to cooperate in transitioning their Lifeline customers to other providers.

Read the DOJ’s press release here.

Illumina Settles $9.8 Million DOJ Suit Over FCA Cybersecurity Claims

Biotechnology company Illumina Inc. has agreed to pay $9.8 million to settle FCA allegations that the company violated federal cybersecurity regulations for medical devices. In the whistleblower suit, Illumina is accused of failing to integrate adequate cybersecurity measures into its software design, development, and marketing, as well as misrepresenting its compliance with US Food and Drug Administration cybersecurity standards from 2016 to 2023. Whistleblower Erica A. Lenore, who will receive $1.9 million from the settlement, also claimed she was retaliated against and terminated for raising concerns about these issues.

The settlement does not require proof of an actual cybersecurity breach; rather, liability was based on the existence of software vulnerabilities and the company’s alleged failure to maintain an adequate product security program and quality systems to address such vulnerabilities.

The case is United States of America v. Illumina Inc., case number 1:23-cv-00372 (D.R.I. 2023).

Crypto Conman Pleads Guilty in $13 Million Investment Scam

Arizona man Vincent Anthony Mazzotta Jr. pleaded guilty to money laundering and conspiracy to obstruct justice for his involvement in a fraudulent cryptocurrency investment scheme. Mazzotta, along with his co-defendant David Saffron and others, deceived investors by promising high-yield returns from cryptocurrency trading using artificial intelligence-powered trading robots. They induced investors into investing with companies such as Mind Capital and Cloud9Capital, ultimately defrauding them of over $13 million. Mazzotta also created a fictitious government entity, the Federal Crypto Reserve, and solicited additional funds from investors under the pretense of investigating Mind Capital, Cloud9Capital, and other companies.

After Saffron’s arrest, Mazzotta conspired to obstruct justice by working with others to destroy evidence and falsify business records in an attempt to hide their involvement in the fraud scheme. Mazzotta pleaded guilty to one count each of money laundering and conspiracy to obstruct justice. He faces up to 10 years and five years in prison, respectively, for these charges.

Read the DOJ’s press release here.