UK retailer settles UK whistleblower's case alleging US customs fraud
PORTLAND, Maine, Feb. 13, 2018 /PRNewswire/ -- Whistleblower law firm Phillips & Cohen LLP announces that a British online clothing retailer, Pure Collection Ltd., and its CEO, Samantha Harrison, have agreed to pay a total of $908,100 to the US government to settle a whistleblower lawsuit brought by a UK resident represented by the law firm.
The whistleblower lawsuit, filed in Maine, alleged Pure Collection engaged in a scheme to deliberately evade US customs duties from 2010 to 2017.
The whistleblower who exposed the alleged fraud, Andrew Patrick, is the first UK resident to collect a reward under the False Claims Act, a US whistleblower law, for alleging customs evasion by a British company. He worked for Pure Collection from 2010 to 2014.
Patrick alleged in his "qui tam" (whistleblower) lawsuit that Pure Collection engaged in a practice known as "splitting." The company trained its employees to divide individual US orders into multiple shipping packages so that the retail value of the merchandise in each package would not trigger customs duties.
"By splitting packages, Pure Collection deprived the US of legitimate payments," Patrick said. "This effectively decreased the true price of its merchandise for US residents, giving the company an unfair advantage over its competitors."
Pure Collection, a private company, is based in Harrogate, North Yorkshire. Phillips & Cohen, which has an office in London, is lead counsel on the case. Constantine Cannon and Daniel J. Murphy of Bernstein, Shur, Sawyer & Nelson P.A. are co-counsel.
"One of the company's marketing pitches to US customers was a promise that they wouldn't have to pay customs duties on the merchandise they bought from Pure Collection online," said Molly Knobler, a whistleblower attorney at Phillips & Cohen. "It was successful as a marketing strategy, but wrong as a company practice."
Anyone, whatever the person's nationality or location, can file a whistleblower lawsuit under the False Claims Act against entities or individuals defrauding the US government and recover funds on the government's behalf. If the government joins the lawsuit and recovers funds as a result of the case, the whistleblower is awarded 15 percent to 25 percent of the amount recovered. Patrick will receive 18 percent of the recovery in this case.
Whistleblowers from other countries who know of violations of US securities and commodity laws also are eligible to file claims and receive rewards under the whistleblower programs at the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Phillips & Cohen represents a number of whistleblowers in the UK and other countries, including the anonymous international whistleblower who received an SEC whistleblower award of more than $32 million, which is the largest SEC whistleblower reward so far.
Knobler thanked the government team for its work, particularly Assistant US Attorney Andrew Lizotte and Civil Chief John G. Osborn of the US Attorney's Office in Maine.
"Cross-border cases can be complicated," Knobler said. "Despite that challenge, Andrew Lizotte and John Osborn did thorough and fast work."
About Phillips & Cohen LLP
Phillips & Cohen is the most successful law firm representing whistleblowers under US whistleblower reward programs, with recoveries totaling more than $12.3 billion. The firm represents US and international whistleblowers in qui tam lawsuits as well as cases brought under the whistleblower programs of the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Internal Revenue Service. Phillips & Cohen has offices in London, Washington, New York, Miami and San Francisco. www.phillipsandcohen.com
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