On January 31, the U.S. Attorney’s Office for the District of Western District of Washington announced that Yakima Products Inc., an automobile accessory company, will pay the United States a settlement of $3 million over one year to resolve allegations of False Claims Act (FCA) violations. The settlement stems from a qui tam whistleblower lawsuit filed by a former employee in April 2021.
U.S. Attorney Tessa M. Gorman stated that Yakima Products Inc. “successfully manufactured and sold automobile accessories for years, but failed to take action when it was informed that it was not paying appropriate duties on material imported from China [and] knowingly avoiding those costs gives Yakima an unfair advantage over other manufacturers who pay those required fees.”
From January 1, 2012, through July 5, 2021, the company allegedly failed to pay the duties it owed despite being informed of the need to do so.
The False Claims Act’s qui tam provision allows private citizens and private parties to file a lawsuit on behalf of the government against an individual or company defrauding the government. Qui tam whistleblowers can earn 15-30% of the funds recovered by the government in successful cases. Since 1986, the False Claims Act has led to $7.3 billion in whistleblower rewards, making it one of the most effective whistleblower laws.
As part of the settlement, the whistleblower who brought forward the allegations to the government in a qui tam lawsuit will receive 17% of the funds paid to the government and have Yakima Products Inc. pay for $75,000 in legal fees.
“This settlement agreement with Yakima marks a significant milestone in our relentless pursuit of fair-trade practices,” said Christopher Perry, Director of Field Operations, U.S. Customs and Border Protection. “I commend the dedication and hard work of CBP’s trade specialists, along with our invaluable federal partners, in upholding the integrity of our nation’s trade policies. Together, we remain steadfast in ensuring a level playing field for American businesses and ensuring everyone plays by the rules.”
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”
Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reforms. National Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act
