A former Harman customs compliance employee helped drive an $11.81 million False Claims Act settlement over alleged AD/CVD evasion and received a $2.3 million whistleblower share.
Harman International Industries, widely known for consumer and automotive audio brands, including Harman Kardon, JBL, and Mark Levinson, agreed to pay $11,809,628 to resolve allegations that it avoided paying anti-dumping (AD) and countervailing duties (CVD) on heat sinks containing extruded aluminum from China.
The allegations in this whistleblower lawsuit filed under the False Claims Act were tied to entries made from June 1, 2011 through March 31, 2023. The settlement underscores how long-running import duty issues can create substantial exposure once the government alleges that the conduct in question rose to the level of fraud against the United States.
The whistleblower’s $2.3M award also reflects what Congress intended under the False Claims Act: encouraging people with credible information to come forward in the public interest.
The Core Allegations: Nonpayment and Concealment
Importers bring goods into the United States by making entry declarations with Customs and paying the applicable duties. Anti-dumping and countervailing duties attach when the Department of Commerce has issued an AD/CVD order covering the product as imported. Imports subject to these additional duties can materially increase the amount owed at entry, in some cases by more than 300% of the value of the goods.
In this case, the government alleged that the Chinese aluminum used in Harman’s heat sinks was subject to AD/CVD duties that were never paid. It also claimed that Harman knowingly avoided paying even after the company was confronted about its failure to comply with US trade practices.
From Port to Court: Exposing Fraud Under the False Claims Act
The False Claims Act is the federal government’s primary civil tool for pursuing fraud that causes financial loss to the United States. It also allows private individuals to file a whistleblower (qui tam) lawsuit on the government’s behalf and share in any recovery.
In customs fraud cases, the alleged loss is often unpaid duties. The story typically begins at the port, with what an importer declared to Customs and what it paid when the entry was filed. When the government alleges the importer knowingly avoided required duties, the case can move from compliance into enforcement.
That shift is sharper when the government also alleges concealment after the duty exposure is identified. At that point, the focus is not only on what happened at entry, but also on whether the United States was knowingly kept from collecting revenue it was entitled to receive. In practice, cases like these often come to light because a whistleblower is willing to step forward with the records and context the government cannot see from the outside.
The Critical Vantage Point of the Whistleblower
The whistleblower in this case was described as a long-time Harman employee with the title “U.S. Customs Compliance & Logistics Cost Specialist.” That role reflects something we see repeatedly in duty evasion cases: the people best positioned to recognize red flags are often the same employees tasked with keeping the company compliant.
From their seat in the Compliance department, the whistleblower would have been positioned to see entry paperwork, broker communications, and duty calculations as they moved through the import process. That kind of access can reveal patterns over time, including whether AD/CVD exposure is being flagged internally, how entries are being described, and what happens when duty questions are escalated.
If you are an employee who has reason to suspect customs fraud on the part of your organization, you can read more about your options here.
Who Can Blow the Whistle on Customs Fraud
This case was driven by a customs compliance employee, but whistleblower claims are not limited to employees. In import supply chains, actionable information can come from many places. In addition to current and former employees, we regularly speak with contractors, brokers, vendors, competitors, and overseas suppliers who have credible information that an importer may have deprived the United States of lawful revenue.
As the instant case demonstrates, whistleblowers stand to win considerable compensation should their information lead to a settlement or judgment. Under the False Claims Act, the whistleblower can receive a percentage of the proceeds, depending on factors such as the value of the information and the whistleblower’s contribution to the case.
A Confidential Conversation With Whistleblower Counsel
If you have firsthand information that a company is evading duties owed to the United States, you may have grounds to bring a claim under the False Claims Act.
At Mark A. Strauss Law, we represent whistleblowers worldwide in matters involving fraud against the United States government. We offer free, confidential consultations to evaluate potential claims, explain your rights, and discuss your next steps. All communications with counsel are protected by the attorney-client privilege.
Fraud is their game. Integrity is yours.
