Executives Fired Over Customs Duty

Kid Brand announced the termination of two executives because of problems involving underpayment of customs duty on furniture. The New Jersey company appears to owe as much as $7 million to U.S. Customs.
The allegation against the company, and subsidiary LaLobi, relates to duty that should have been paid on furniture manufactured in China. The duty is owed because of what is referred to as “anti-dumping” provisions. “Dumping” is a practice where a manufacturer sells a product at or below the actual production cost. The Customs Service imposes the duty to “level the playing field” for U.S. manufacturers.
It has not yet been disclosed how the information came to the attention of Custom officials. However, if the information was brought to the officials’ attention by a “whistleblower” the Federal Government will be paying a “relator fee” of up to 30%. It is unusual for the government to pay the full 30%. Rewards of 15-20% are not unusual. If a relator is involved a reward of around $1.4 million can be expected.