For almost a decade, Centric Brakes in California imported finished brake pads from China but claimed they were not finished or mounted brake pads according to court documents. Finished brake pads have a 2.5% tariff. Centric violated the False Claims Act and the Tariff Act of 1930 by knowingly underpaying customs duties owed to the United States on imported brake pads.
The US Customs and Border Protection found out about the falsified paperwork not by inspecting the containers of brake pads going to Centric’s warehouse, but by two whistle blowers at Centric. As part of the settlement, each will receive more than $1.4-million of the $8-million settlement.
The United States alleged that, from 2007 to 2017, Centric Parts falsely claimed on entry documents that mounted brake pads, which carry a 2.5 percent tariff, were unmounted brake pads, which require no tariff. The United States further alleged that when confronted with the misclassifications in 2017, company officials decided to conceal and not disclose the past false entry documents to Customs. As a result of Centric Parts’ alleged omissions and false statements regarding its imported products, the company knowingly evaded millions of dollars of customs duties it owed to the United States.