BIRMINGHAM, Ala. — Graphite Electrode Sales, a company which specializes in graphite products for the steel industry, caught a competitor breaking the law and is being rewarded with a big pay day. The Birmingham business will receive $480,000 from a U.S. Department of Justice as part of a settlement for blowing the whistle on a competitor that imported graphite from China in violation of U.S. anti-dumping laws.
The busted companies – Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc.,- are all based out of Pennsylvania and engaged in a scheme to evade customs duties on imports of small-diameter graphite electrodes from China.
The settlement resolves claims that Ameri-Source International Inc. evaded antidumping duties on 15 shipments of small-diameter graphite electrodes from China from December 2009 to March 2012. Ameri-Source International misclassified the size of the electrodes to avoid paying the duties.
Ameri-Source International waived indictment and pleaded guilty to two counts of smuggling goods into the United States. The U.S. District Court in the Western District of Pennsylvania immediately sentenced the corporation to pay a $250,000 criminal fine within 10 days and applied the payment of the $3 million to the loss of antidumping duties of $2,137,420.00.
“The nation’s customs laws are designed to protect domestic manufacturers from foreign products that enter the country at below-market prices due to unfair practices abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
In 2008, Congress put high duties on the importation of certain sized graphite rods – 16-inch in diameter or less – from China in order to prevent the products from being dumped into the American market and harming U.S. businesses.
The claim against Ameri-Source was initially brought by GES back in 2013 under the False Claims Act. The law imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. It is the federal Government’s primary litigation tool in combating fraud against the Government.
Under the act, private citizens or corporations can file suit against another private citizen or corporation if they have knowledge of wrongdoing. If the Department of Justice investigates and joins in on the matter, the suing company shares in the settlement. “The government doesn’t have any way of policing it [False Claims Act]. They have to have whistleblowers,” said Jim Barger, one of the attorneys for GES.
GES, headquartered in Birmingham, Alabama, is the largest importer of graphite and carbon products throughout North America. The company was established by Harry Kearney who started importing Japanese electrodes to the United States in 1958.
