Civil Plaintiff

International Vitamins Corporation Settles Civil Fraud Lawsuit for $22.8 Million

Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director of CBP Field Operations New York, announced today that the United States has filed and settled a civil lawsuit against International Vitamins Corporation (“IVC”), a United States-based company that imports and sells vitamins and nutritional supplements from China.  The settlement resolves claims that, for years, IVC defrauded the United States by misclassifying more than 30 of its products under the Harmonized Tariff Schedule (“HTS”) in order to avoid paying customs duties and by failing to pay back duties owed to the United States even after IVC finally corrected its longstanding misclassifications.

Under the settlement agreement approved by U.S. District Judge Mary Kay Vyskocil, IVC will pay $22,865,055 to the United States.  As part of the settlement agreement, IVC also made admissions regarding its conduct.  IVC admitted that, between 2015 and 2019, it utilized HTS classifications for 32 products it imported from China (the “Covered Products”) that carried duty-free rates, even though those products, if accurately classified, would have been subject to the payment of duties.  IVC also admitted that even after it retained a consultant in 2018 who informed IVC that it had been misclassifying the Covered Products, IVC did not implement the correct classifications for over nine months and never remitted duties that it had underpaid to the United States because of its misclassification of the Covered Products.

U.S. Attorney Damian Williams said: “IVC engaged in a fraudulent scheme to avoid customs duties owed to the United States by misclassifying many of its products as duty-free when importing them from China.  Worse yet, IVC made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed.  This Office is committed to combatting customs fraud by holding companies accountable when they attempt to avoid paying what they owe when importing goods from abroad.”

Read the source article at justice.gov

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