Popular Healthcare Uniform Company Charged With Violating the FCA

The DOJ announced that it has filed a complaint against Barco Uniforms Inc., its suppliers, and individuals Kenny and David Chan, alleging violations of the False Claims Act.

According to the DOJ, Barco and its associated entities knowingly underpaid customs duties on imported apparel. When importing merchandise into the U.S., the importer must declare the goods’ value, duty status, applicable rates, and owed amounts, with U.S. Customs and Border Protection (CBP) relying on these details to assess and collect duties. A commercial invoice is mandatory to substantiate the declared value of the goods. Barco, which supplies uniforms to industries like healthcare and hospitality, allegedly used a double-invoicing scheme to undervalue imported goods, thereby reducing the duties owed to CBP. And, according to the complaint, Barco continued these practices even after being warned by a third-party auditor about the risks of underpaying duties.

This matter was initiated under the qui tam provisions of the FCA by the former director of product commercialization at Barco. The United States ultimately intervened to pursue the matter, but the whistleblower may still recover over 15% of funds collected in the matter. Upon announcement of the complaint, Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division commented that “[t] hose who import and sell foreign-made goods in the United States must comply with all trade laws[…], [t]he Department will hold accountable parties who evade or underpay duties owed on imported merchandise.”

The attorneys at Chilivis Grubman also represent clients of all types and sizes in connection to False Claims Act investigations and litigation.  If you need assistance with such a matter, please contact us today.