Women’s Apparel Importer Alexis to Pay $7.7 Million Settlement Over Alleged Customs Duties Underpayment

Women’s apparel importer Alexis has agreed to a settlement of nearly $7.7 million to resolve allegations that it intentionally underpaid customs duties, as revealed by a whistleblower, according to the Department of Justice (DOJ). The company admitted to violating the False Claims Act by undervaluing the clothing it imported into the U.S., as detailed in a DOJ press release issued on Friday. The DOJ acted on behalf of U.S. Customs and Border Protection (CBP) in this matter.

The case, initially brought under the qui tam provisions of the False Claims Act, was filed in the U.S. District Court for the Southern District of Florida. Following disputes between the U.S. government and Alexis, the whistleblower case was dismissed on Thursday, according to the DOJ.

The issue centers on the obligations of importers under the Harmonized Tariff Schedule of the U.S. to accurately declare the value of items entering the country. This accurate reporting is essential for CBP to properly assess any applicable duties or fees. Between January 2015 and December 2022, Alexis failed to report accurately that certain garments it imported included trims, which increased their value, the DOJ alleged. Additionally, CBP identified discrepancies between Alexis’s reported sales figures and the values listed on customs forms, the DOJ noted.

As part of the settlement, Alexis and its senior management committed to pursuing “the highest level” of compliance regarding imports as a corporate priority. The DOJ acknowledged that Alexis “fully cooperated” with the investigation, voluntarily submitting information and records that aided in determining the amount of customs duties and fees that had been underpaid.

In response to the investigation, Alexis implemented new compliance procedures and employee training programs aimed at preventing future understatements of the value of its imported clothing. The DOJ noted that senior management collaborated with Alexis’s expert trade counsel to establish both internal and external procedures and corrective actions to ensure accurate value reporting.

Alexis could not immediately be reached for comment.

By fLEXI tEAM