Two Canada-based steel companies, Farjess Inc. and Royal Canadian Steel Inc., along with their part-owner and president, Feroz Jessani, have agreed to pay $19 million to resolve allegations that they violated the False Claims Act by knowingly and improperly failing to pay duties owed on flat-rolled steel that was manufactured in Europe and Asia.

To enter goods into the United States, an importer must declare, among other things, the country of origin of the goods, the value of the goods, whether the goods are subject to duties, and the amount of duties owed. U.S. Customs and Border Protection collects applicable duties.

The settlement resolves allegations that, from May 2019 through January 2025, Farjess Inc., Royal Canadian Steel Inc., and Mr Jessani avoided duties owed to the United States by knowingly misrepresenting to CBP that the country of origin of certain flat-rolled steel was Canada or the United States, when in fact they knew the true country of origin was China, Indonesia, Italy, Turkey, or Vietnam, according to a statement by the U.S. justice department.

The settlement resolves a civil lawsuit filed by Shamsh Dhala, a broker who worked with Farjess Inc., under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and to share in a portion of the government’s recovery.

“Import duties serve an important role in protecting our national interests generally and the American steel industry in particular,” said assistant attorney general Brett Shumate of the Justice Department’s Civil Division. “The Department of Justice will zealously pursue anyone who fraudulently evades the duties owed on steel products imported into this country.”  

“Our border is the frontline of American industry. Approximately half of all U.S.-Canada land trade flows through our district.” said U.S. attorney Jerome Gorgon Jr for the Eastern District of Michigan. “And we will continue to protect our businesses from foreign fraudsters.”