False Claims Under "Buy American" & Customs Laws

Workers Can Fight Back Against Some Businesses that Hurt American Manufacturing Jobs

We have all seen American manufacturing jobs disappear and get shipped overseas to countries where workers are paid pennies on the dollar. Free trade and open markets can make it seem like there is no way to stop Americans from losing their jobs to foreign competition.

But there are two areas of federal law that favor American manufacturing jobs over foreign competition. And, when an employee sees that a company is violating these laws, the employee can get money compensation — both for him or herself and for the U.S. government — if the employee speaks up.

If you are aware that a business has lied or committed fraud to get around these laws favoring American jobs, contact the Kansas City whistleblower attorneys here at Brady & Associates for a free, confidential evaluation of your case.

"Buy American" and Customs Laws that Protect U.S. Jobs

First, various “Buy American” laws generally require businesses contracting with the federal government to certify that the goods they sell to the government, or the components used in construction contracts with the government, are manufactured either in the United States or in certain approved countries with whom the United States has trade agreements.

Second, even before President Trump announced new tariffs on foreign steel and aluminum in early 2018, the United States had existing tariffs, typically called “customs duties,” placed on certain products from certain countries due to unfair competition to the detriment of competing American businesses.

The False Claims Act: How to Stop Businesses that Cheat the Government

Some businesses nonetheless defraud the federal government by certifying compliance with “Buy American” laws by selling the federal government products, or using components in federal construction projects, that were manufactured in non-approved foreign countries, most notably China. Some other businesses defraud the federal government by making false statements concerning imported products in order to unlawfully avoid customs duties.

In either case, a federal law, known as the False Claims Act, incentivizes whistleblowers, who can be either individuals or business entities, to bring lawsuits to remedy such fraud against the government. The False Claims Act provides that the government can claim damages of three times the amount of the fraud, plus substantial penalties. False Claims Act lawsuits have resulted in the government recouping payments made by government agencies to businesses who engaged in “Buy American” fraud, and to recover unpaid customs duties that businesses fraudulently avoided paying to the government.

How the False Claims Act Works

Generally, the False Claims Act provides that, where the United States recovers money from a False Claims Act lawsuit, the person or business entity who filed the lawsuit on behalf of the government is awarded between 15 and 25 percent of the government’s recovery. In the context of a successful False Claims Act lawsuit to remedy Buy American violations or customs duties fraud, the result is a triple win for the whistleblower and American taxpayers:

  1. The whistleblower enjoys a monetary award from the government’s recovery;
  2. American taxpayers benefit from the government’s recovery; and
  3. The competitive disadvantages that the Buy American laws and the customs duties were designed to eliminate for American businesses and their American workers are enforced, which levels the playing field against unfair foreign imports.

Filing and presenting a False Claims Act case to remedy fraud against the government and to obtain an award out of the government’s recovery requires legal counsel with specific legal skills and experience.

First, the allegations in a False Claims Act lawsuit must be pled “with particularity” as to the specific type of fraud at issue. Doing so requires one or more attorneys willing to devote substantial time and resources to investigate the case, including performing extensive legal research as to the regulatory schemes of one or more of the federal agencies that were defrauded.

False Claims Act cases must be filed “under seal” by a licensed attorney. The seal hides the existence of the lawsuit and the identity of the whistleblower(s) from the target defendant(s) while the government investigates the case. Even before the lawsuit is filed, the False Claims Act requires the attorneys representing the whistleblower(s) to file a “disclosure statement” with the Attorney General’s office in Washington, D.C., and with the United States Attorney’s office in the jurisdiction where the lawsuit will be filed.

In addition to presenting the allegations of fraud in a narrative form, the disclosure statement should include a “roadmap” for the government’s investigation — such as witnesses to interview and documents to request and the anticipated evidence that will be obtained from those sources. The disclosure statement should also serve as a persuasive legal brief by including analysis of the attorneys’ research of the regulatory landscape, and how the defendant(s) violated the law resulting in fraud against the government. If the lawsuit and the disclosure statement fail to convince the government’s attorneys and investigators of both the factual and legal merits of the case from the get go, the whistleblower’s prospects of recovery are severely diminished.

Contact Our Kansas City Whistleblower Attorneys for a Free, Confidential Consultation

Attorneys at Brady & Associates in Overland Park, Kansas have presented False Claims Act cases in various jurisdictions in the United States on behalf of whistleblowers. Successful False Claims Act cases benefit taxpayers by remedying fraud by unscrupulous businesses against the federal government and benefit the whistleblowers, who receive awards out of the government’s recoveries. False Claims Act cases that remedy Buy American violations or customs duties fraud also have the effect of leveling the playing field on behalf of American businesses and American workers against unfair foreign competition.

For a free, confidential consultation, please call (913) 696-0925 or complete our online information form. Based in Overland Park near Kansas City, we represent employees in Kansas, Missouri, and elsewhere.

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