U.S. Attorney Announces Settlement Of Civil Fraud Lawsuit Against Garment Manfacturer And Its Owner For Fraudulently Underreporting Value Of Imported Goods To Evade Customs Duties | USAO-SDNY

Damian Williams, the US Attorney for the Southern District of New York; Peter C. Fitzhugh, the New York State Department’s special envoy on Homeland Security Investigations (“HSI”), and Marty Raybon, acting director, Field Operations, New York, US Customs and Border Protection (“CBP”), announced today that the United States has filed a civil fraud lawsuit against QUEEN APPAREL NY, INC. (“QUEEN”), a defunct apparel manufacturer and importer, and HANK HYUNHO CHOI (“CHOI”), the sole owner of QUEEN, for defrauding the United States by knowingly evading customs duties on imported goods. Specifically, the government claims that, knowing CHOI, QUEEN repeatedly forged customs forms for years by undervaluing garments made abroad and then imported into the United States. As part of the settlement approved today by U.S. District Judge George B. Daniels by U.S. District Judge George B. Daniels of Manhattan Federal Court, QUEEN and CHOI made confessions of their conduct, agreeing to pay $ 50,000 to the United States to pay and, among other things, refrain from acting as a registered importer for the purpose of importing goods into the United States.

US Attorney Damian Williams said: “Queen and her owner have committed a fraudulent scheme to defraud the government of tariffs on imported clothing. This office continues to work to fight customs fraud. Manufacturers, importers and their owners are held responsible for circumventing tariffs by lying about the value of the goods they bring into the United States. “

Peter C. Fitzhugh, HSI Special Agent in charge, said, “Queen Apparel NY has under-reported the value of garments imported into the United States to avoid customs duties, resulting in a significant financial loss to the US government led. Import fraud affects the integrity of our economy and trade, so HSI has a priority to investigate any organization that makes profit over honesty. In close cooperation with our partners at US Customs and Border Protection, we jointly ensure that everything that crosses our borders complies with US law. “

Marty Raybon, CBP’s Managing Director for New York Field Operations, said, “As global supply chains become more complex, it is important for American companies to know their suppliers and have confidence in their integrity. The outcome of this case is evidence of the commitment of our partners in the US Attorney General, Homeland Security Investigations, and the men and women of CBP in enforcing our nation’s trade laws and the accountability of those who commit this type of fraud. ”

QUEEN is a New York based clothing manufacturer and importer. In the course of its business, QUEEN manufactured and imported garments for third parties who then sold the garments through department stores and national retail chains in the United States. CHOI was the sole owner of QUEEN and was involved in the management and operations of the company.

The lawsuit previously filed in Manhattan federal court alleges that QUEEN and CHOI manufactured garments overseas from 2009 to 2013, imported those garments into the United States, and then repeatedly and incorrectly undervalued those garments on customs forms to avoid paying legal duties in the United States.

As part of the settlement, QUEEN and CHOI acknowledge, acknowledge, and take responsibility for the following conduct:

• QUEEN made garments and imported them to the USA for various wholesalers. CHOI was the sole owner of QUEEN and was involved in the management and operations of QUEEN, including importing goods.

• QUEEN was responsible for paying all import duties owed to the United States on clothing made abroad and imported into the United States by QUEEN.

• During the relevant period, and at the direction of CHOI, QUEEN has repeatedly undervalued the garments imported into the United States by providing false information on immigration documents and commercial invoices presented to CBP. As a result of these false evaluations, QUEEN has underpaid the due and due to the United States tariffs.

On March 26, 2019, the United States resolved a related civil fraud lawsuit against Byer California, Inc., a wholesaler that uses QUEEN to manufacture and import clothing from Vietnam. The conduct on this matter was first brought to the attention of federal law enforcement by a whistleblower who had filed a lawsuit under the False Claims Act.

Mr. Williams praised HSI’s investigative work on the case. He also thanked CBP for their support.

This case is handled by the Office’s Civil Fraud Department. US Assistant Attorney Jacob Bergman is in charge of the case.