Importer Agrees To Pay $798,334

SHERMAN, Texas – U.S. Attorney Damien M. Diggs of the Eastern District of Texas announced that Homestar North America, LLC has agreed to pay $798,334 to resolve allegations that it violated the False Claims Act by failing to pay customs duties owed for furniture imports from China.

Customs laws require importers to pay duties determined by the actual value of the goods imported. Liability to pay duties arises immediately and automatically upon importing goods into the United States. This settlement resolves allegations that Homestar North America, LLC and its parent company, Homestar Corporation, conspired to underreport the value of imported goods delivered to Homestar North America, LLC in the United States following the two increases on Section 301 tariffs for specific products manufactured in China under the Harmonized Tariff Schedule of the United States. The two increases took effect on September 24, 2018, and June 15, 2019.

Specifically, the government alleged that from September 2018 through December 2022, they falsified invoices created and submitted to the United States Customs and Border Protection (CBP) containing false, lower values for the goods Homestar North America, LLC received from Homestar Corporation, its Chinese parent company, to avoid payment of the increased duties owed. The government contended that they had a second set of invoices containing the actual value of the imported goods, which they withheld from CBP but were then used to ensure that Homestar North America, LLC paid its parent company and supplier the imported goods. The government alleged that this false invoicing practice resulted in the undervaluation of goods imported into the United States, which resulted in a loss of revenue to the United States.

“Imported goods are necessary for the consumer economy in the United States. However, companies that wish to gain access to the United States markets must comply with all laws regarding the import of their goods, including the obligation to disclose the actual value of imported goods and to pay the duties owed as a result of importation,” said U.S. Attorney Damien M. Diggs. “Instead of complying with those obligations, Homestar disregarded its obligations and improved its bottom line. Our office will aggressively pursue any company that similarly chooses its bottom line over compliance with the law.”

“CBP’s Consumer Products and Mass Merchandising Center of Excellence and Expertise worked in collaboration with the U.S. Attorney’s Office to review thousands of documents, hundreds of entry summaries, and analyzed financial reports provided by Homestar, as relevant to the undervaluation and payment allegations,” said Director Gregory Alvarez of the CBP Atlanta Field Office. “CBP is proud of the investigative work and analysis done by its employees on this case and will continue to work collaboratively with inter-agency stakeholders to safeguard our nation’s economic security.”

The civil settlement resolves claims brought by a relator under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow a private party, known as a relator, to file an action on behalf of the United States and receive a portion of any recovery. The qui tam action is captioned U.S. ex rel. Larry J. Edwards, Jr. v. Homestar North America, LLC, Cause No. 4:21-cv-00148 (E.D. Tex.). The whistleblower will receive approximately $151,683 as part of today’s resolution.

The resolution resulted from a coordinated effort between the U.S. Attorney’s Office, Eastern District of Texas, with assistance from CBP and the U.S. Immigration and Customs Enforcement Homeland Security Investigations.

Assistant U.S. Attorney Betty Young handled the matter for the Eastern District of Texas.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.