Harman International Industries, Inc., a leading audio electronics company for automakers, consumers, and enterprises worldwide, and whose portfolio of brands includes Harman Kardon®, JBL®, and Mark Levinson®, has agreed to pay $11.8 million to settle allegations that it violated the False Claims Act and other statutes by evading antidumping and countervailing duties on goods made of extruded aluminum from the People’s Republic of China.
The settlement resolves allegations that, from June 1, 2011, through March 31, 2023, Harman knowingly imported heat sinks that contained extruded aluminum from the PRC without paying the required fees. The United States further contended that when confronted with its failure to pay required fees for the heat sinks, Harman concealed and decided not to disclose its knowing avoidance of AD/CVD to the United States.
To enter goods into the United States, an importer must declare, among other things, whether the goods are subject to duties and the amount of duties owed. The Department of Commerce assesses, and U.S. Customs and Border Protection collects, antidumping and countervailing duties to level the playing field for American companies. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. During the time period, heat sinks containing extruded aluminum, which are common thermal controlling devices in the electronics industry, were subject to significant antidumping and countervailing duties.
“For more than a decade, Harman knowingly evaded duties designed to prevent unfair foreign subsidies and trade practices,” said United States Attorney Gorgon. “But we will use the law to protect our American companies against cheaters. And when we catch them, they will pay for it.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit is captioned United States ex rel. Jesrel Mitre v. Harman International Industries, Inc., Case No. 2:20-cv-12487. The whistleblower will receive $2,302,877.46 of the settlement proceeds.
"CBP played a critical role in assisting with DOJ’s investigation concerning Harman’s failure to pay antidumping and countervailing duties on imported electronic components, resulting in a settlement of $11.8 million to resolve its civil liability under the False Claims Act and the customs laws,” said Acting Executive Assistant Commissioner Susan S. Thomas, of CBP’s Office of Trade. “This case underscores CBP’s commitment to enforcing the customs and trade laws and ensuring the protection of revenue to promote U.S. economic security.”
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Department of Justice, U.S. Customs and Border Protection, and the U.S. Department of Commerce. This matter was handled by Assistant U.S. Attorney Anthony Gentner from the United States Attorney’s Office for the Eastern District of Michigan.
“We commend the sustained effort and diligence of DOJ and CBP in maintaining the integrity of AD/CVD orders,” said Christopher Abbott, performing the duties and functions of the Assistant Secretary of Enforcement and Compliance at the Department of Commerce. “Their work ensures that American industries and workers receive the relief they are entitled to under the law.”
The pursuit of this matter illustrates the government’s emphasis on combating fraud, waste, and abuse. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential customs fraud can be reported to CBP at www.help.cbp.gov/s/tip
“This settlement reflects the strong partnership between the Department of Commerce OIG, our law enforcement partners, and the Department of Justice to ensure the integrity of U.S. trade laws and hold companies accountable when they circumvent duties designed to protect American industries,” said Acting Special Agent in Charge Laura Barsczewsk of the U.S. Department of Commerce Office of Inspector General. “We will continue to work together to uphold integrity in public service.”
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