Otter Products LLC, Maker of Otter Box Electronics Cases, Has Paid Over $4 Million to Settle Whistleblower Allegations, Parker Waichman LLP reports

A former Otter Products Employee alleges that the firm violated the False Claims Act and Tariff Act of 1930 by underpaying Customs duties.

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“When companies become involved in unethical activities and other misconduct that involves government agencies, they are not only defrauding the country, they are defrauding its citizens,” said Gary Falkowitz, Managing Attorney at Parker Waichman LLP.

Port Washington, New York (PRWEB) May 04, 2014

Parker Waichman LLP, a national law firm long dedicated to protecting the rights of whistleblowers who have reported, or seek to report, employers engaged in illegal activities, announces that Otter Products LLC has agreed to pay $4.3 million to the United States government to settle whistleblower allegations, according to the Northern Colorado Business Report dated April 21, 2014.

Allegations include that Otter Products violated federal law when it underpaid customs duties, according to an April 21, 2014 announcement from the U.S. Attorney John Walsh's office, via the U.S. Department of Justice. “America's economic security and prosperity are at the heart of U.S. trade law," Walsh said in the statement. "Customs duties are a significant source of revenue for the United States, and this settlement demonstrates that the Department of Justice will zealously enforce their lawful collection," he added.

The U.S. Attorney's Office for the District of Colorado, the Department of Homeland Security, and the U.S. Customs and Border Protection announced the settlement in a statement issued April 20, 2014, according to the Northern Colorado Business Report. The lawsuit was filed on September 26, 2011 in the United States District Court for the District of Colorado (United States of America ex rel. Bonnie M. Jimenez v. Otter Products LLC dba OtterBox, case number 1:11-cv-02937)

Acting assistant commissioner for the Office of International Trade, Richard Di Nucci, discussed the significance of trade enforcement saying, “Trade enforcement is a priority for U.S. Customs and Border Protection due to the significant role that it plays in the economic security of the United States,” according to a Law360 reported dated April 21. 2014. “CBP is responsible for facilitating the legitimate flow of trade, while enforcing the laws against the evasion of duties that protect against unfair trade practices,” Di Nucci said.
The United States alleged that, from January 1, 2006 to December 31, 2011, Otter Products omitted the customs values of duties it owed on its products manufactured oversees that were imported for sales and distribution, and that it was aware of these omissions, according to the Law360 report. The firm sells OtterBox protective cases for smartphones and tablets.

Otter Products was responsible to submit entry documents to U.S. Customs, as well as to pay customs duties that were owed on its imported products. The firm saw large growth during the period involved and officials there claimed that the firm did not knowingly underpay duties. Otter Products settled without admitting liability in the whistleblower lawsuit brought by a former supply chain director, who will receive $830,000 in the settlement; U.S. Attorney Amanda Rocque negotiated the settlement, according to the Northern Colorado Business Report. Under whistleblower regulations, in addition to the $830,000 share being awarded to the whistleblower, the Department of Justice will receive 3 percent of the total award, and U.S. Customs and Border Protection will receive the remainder, a Denver Post report dated April 21, 2014 indicated.

The whistleblower alleges her job was terminated when she continued to advise Otter Products about the duty payment issue involving its products manufactured in China and imported to the U.S., according to The Denver Post. The whistleblower alleged that Otter Products neglected to include the value of services, so-called “assists”, from the declared value on the entry documents created for the imported products. She also alleged that the value associated with the engineering, development, and design work that was conducted in China and required for production should have been factored into the duties that OtterBox was responsible to pay under U.S. law, but did not pay.

Federal allegations include that Otter Products also made false statements in documents provided to Customs and Border Protection. These omissions and false statements, according to the Northern Colorado Business Report, indicated that Otter Products was aware that it underpaid customs duties and violated the False Claims Act, said Walsh.
“When companies become involved in unethical activities and other misconduct that involves government agencies, they are not only defrauding the country, they are defrauding its citizens,” said Gary Falkowitz, Managing Attorney at Parker Waichman LLP. “These types of unethical activities are frowned upon and should be stopped.”

Parker Waichman LLP supports whistleblower efforts to report illegal activities that may harm citizens. The firm continues to offer free legal evaluations to those individuals who believe their companies may be involved in wrongdoing. If you believe that your company is involved in illegal activities, or for more information, please visit the firm’s Whistleblower page at yourlawyer.com or call 1-800-LAW-INFO (1-800-529-4636).


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