The U.S. Department of Justice announced Wednesday that it has secured $15 million from a California-based furniture chain to resolve claims that it improperly evaded anti-dumping duties on wooden bedroom furniture imported from China.

The settlement, in which Z Gallerie admitted no wrongdoing, stems from a whistleblower suit filed in federal court in Savannah by an Alabama merchant who sells furniture online, said Atlanta attorney Page Pate. He sued Z Gallerie in 2013 on behalf of the whistleblower, Huntsville merchant Kelly Wells.

Pate said Wells contacted him with her suspicions when she realized she couldn't compete with prices of large retailers who, like her, were buying bedroom furniture from China. The duties are supposed to be uniformly applied, Pate said, but Wells discovered that Z Gallerie appeared to be misclassifying imported bedroom furniture items as living room, hall or bath furniture. "Anything," he said, "to keep it from looking like an item for the bedroom."

But, the lawyer added, the furniture chain would display or advertise the furniture items imported as non-bedroom furniture in tandem with its bedroom furniture displays.

Wednesday's settlement resolves allegations that Z Gallerie evaded anti-dumping duties for seven years—from 2007 to 2014—by conspiring with others to misclassify the imported furniture, federal prosecutors in Washington said in a news release. The furniture at issue included Bassett Mirror Co. merchandise that Pate said has become a hot commodity after the furniture style was made popular by Kim Kardashian, who had furnished her bedroom with mirrored furniture.

Pate said that Wells will receive 16 percent of the government settlement, about $2.4 million. Under the federal False Claims Act, private citizens may, on behalf of the federal government, sue individuals or companies who defraud government programs. If successful, whistleblowers can receive as much as 25 percent of the recovered damages.

Pate would not comment on whether additional defendants were named in the suit that have not yet settled with the government.

In announcing the settlement, U.S. Attorney Edward J. Tarver for the Southern District of Georgia, whose office intervened and prosecuted the case, said: "Savannah is home to one of the fastest growing ports in the country, handling almost 10 percent of all the containerized cargo volume in the United States."

"This U.S. Attorney's Office will work hard to make sure those using the Port of Savannah play by the rules, and to hold those who try to cheat their way out of paying customs duties accountable."

Wells' suit is not the first time that Z Gallerie has been sued successfully in Georgia over problematic Chinese imports. Last year, a federal jury in Atlanta awarded Roswell artist Zheng Li $885,174 after Li discovered that Chinese manufacturers had infringed his 2004 oil painting, "Piano No. 9" and were selling bogus copies of his painting under another artist's name through Z Gallerie and several other galleries across the country. Z Gallerie was found liable for $322,629 of the total verdict, according to court records.

(Source: dailyreportonline.com  Author: R. Robin McDonald)