United States Attorney
Southern District of New York
AUGUST 31, 2011 ELLEN DAVIS,
Whistle-Blower Lawsuit Exposing Bogus Invoicing
Leads To $3.85 Million Settlement
PREET BHARARA, the United States Attorney for the
Southern District of New York, and JAMES T. HAYES, JR., the
Special Agent-in-Charge of the New York Office of U.S.
Immigrations and Customs Enforcement’s (“ICE”) Homeland Security
Investigations (“HSI”), announced today that the United States
has filed, and simultaneously settled, a civil customs fraud
lawsuit against NOBLE JEWELRY LTD., an international jewelry
company based in Hong Kong, and its related New York State
corporations, NOBLE JEWELRY LIMITED and CHAD ALLISON CORPORATION
(collectively, “THE NOBLE JEWELRY COMPANIES”), for using bogus
invoices to cheat the United States out of more than $1 million
dollars in customs duties over the course of a decade. In the
settlement, approved in Manhattan federal court by U.S. District
Judge JOHN G. KOELTL, THE NOBLE JEWELRY COMPANIES accepted
responsibility for under-reporting the value of their imported
merchandise, and agreed to pay $3.85 million to the United States
as damages and penalties under the False Claims Act.
Manhattan U.S. Attorney PREET BHARARA stated: “This
case is an excellent example of the essential public service a
whistle-blower can perform by partnering with the government to
expose illegal conduct that adversely affects the public fisc.
It is also a reminder of our continued vigilance in pursuit of
fraud and its perpetrators.”
ICE HSI Special Agent-in-Charge JAMES T. HAYES, JR.,
stated: “Companies that break our nation’s customs laws gain an
unfair advantage over law-abiding competitors. ICE HSI will use
all of its resources to investigate companies that try to beat
the system and bring them to compliance.”
According to the Complaint filed in Manhattan federal
THE NOBLE JEWELRY COMPANIES are related through a
common holding company, NOBLE JEWELRY HOLDINGS LIMITED, which is
incorporated in the Cayman Islands and operates principally in
Hong Kong. From approximately 1998 through 2010, THE NOBLE
JEWELRY COMPANIES engaged in a fraudulent scheme to avoid the
payment of customs duties by presenting the Government with bogus
invoices, which significantly understated the value of the
imported jewelry. The bogus invoices were used to calculate
customs duties. THE NOBLE JEWELRY COMPANIES maintained a second
set of books with accurate invoices, but they were withheld from
the Government. Through this fraud, they avoided paying more
than $1 million dollars in customs duties.
* * *
As part of the settlement, THE NOBLE JEWELRY COMPANIES
have admitted wrongdoing, acknowledging that, between 1998 and
2010, they “repeatedly presented to the Government invoices for
jewelry being imported into the United States that understated
the value of the goods imported;” that they “maintained, for
their own commercial use, separate invoices which accurately
listed the value of the jewelry being imported;” that they took
steps “to avoid detection;” and that their conduct “deprived the
Government of hundreds of thousands of dollars of customs
The allegations of fraud stated in the Complaint were
first brought to the attention of federal law enforcement by a
whistle-blower, who filed a lawsuit under the False Claims Act.
The False Claims Act permits the Government to recover up to
three times the amount of damages incurred by the United States,
plus civil penalties ranging from $5,500 to $11,000 per
violation. Private parties who have knowledge of fraud committed
against the Government may file suit on behalf of the Government
and share in any recovery. The United States may then intervene
and file its own lawsuit for treble damages and penalties, as it
did in this case.
Mr. BHARARA praised the investigative work of ICE. He
also thanked U.S. Customs and Border Protection for its
The case is being handled by the Office’s Civil Frauds
Unit. Assistant United States Attorney BRIAN M. FELDMAN is in
charge of the case.
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