Whistleblowers Share $8 Million False Claims Act Settlement of Unpaid Import Duties Allegations. Exposing Misconduct.

Whistleblowers Share $8 Million False Claims Act Settlement of Unpaid Import Duties Allegations

August 18, 2020

Two whistleblowers receive $1.48 million as part of a recent settlement to resolve False Claims Act allegations between a vehicle parts supplier and the government. The False Claims Act allows private parties to sue on behalf of the U.S. government and receive a portion of the financial recovery from the claims. Whistleblowers are eligible to collect anywhere from 15% to 30% of the recovery, including from settlements.

In this case, the whistleblowers Jeffrey Hawk and Steven Hughes were former employees of the defendant, CWD Holdings LLC, and it’s subsidiaries. The company supplies frameworks and breaks for passenger vehicles and trucks. Hawk and Hughes each filed separate qui tam lawsuits on behalf of the U.S. government that alleged defendants knowingly avoided specific customs duties on brake pads imported into the U.S. Unmounted brake pads are generally not subject to an import tariff, while mounted brake pads are subject to a 2.5% tariff per the Harmonized Tariff Schedule. The claims alleged that CWD Holdings LLC and its subsidiaries falsely reported the brake pads as unmounted, thus avoiding this fee. CWD Holdings agreed to pay $8 million to settle the allegations covering from 2007 to 2017 with no determination of liability.

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