Washington, D.C. — The United States has filed a civil complaint against Barco Uniforms Inc., a prominent apparel supplier, and several associated individuals and companies, accusing them of violating the False Claims Act by knowingly underpaying customs duties on imported garments.
The complaint, unsealed this week, names Barco Uniforms, company executives Kenny Chan and David Chan, and several overseas suppliers operated by the Chans. The Justice Department alleges that the parties conspired to undervalue imported apparel from countries including the People’s Republic of China (PRC), thereby evading millions in lawful import duties.
“Those who import and sell foreign-made goods in the United States must comply with all trade laws,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division. “The Department will hold accountable parties who evade or underpay duties owed on imported merchandise.”
According to the complaint, the scheme involved a double-invoicing system, where false entry summaries were submitted to U.S. Customs and Border Protection (CBP). These summaries undervalued the imported garments, reducing the amount of customs duties paid by Barco and its affiliates.
The companies allegedly continued the practice even after being warned by a third-party auditor, who advised Barco to review its duty calculations and address potential risks tied to their pricing agreements with overseas manufacturers.
In addition to Barco and its executives, the complaint names the following entities controlled by the Chans:
- Able Allied Limited
- Nathan Global Direct Inc.
- J&K Garment Inc.
- Mega Goodwill Ltd.
- JS Garment Co.
- Superway Import & Export Inc.
“We will not allow parties engaging in fraudulent schemes to underpay rightful customs duties to profit at the expense of the American public,” said Acting U.S. Attorney Michele Beckwith for the Eastern District of California.
CBP’s San Francisco Field Office played a key role in the investigation, along with Homeland Security Investigations and attorneys from the Department of Justice. “CBP is proud of the investigative work and analysis done on this case,” said CBP Director of Field Operations David Salazar.
The case, United States ex rel. Lee v. Barco Uniforms Inc., et al., was initially filed by Toni Lee, a former director of product commercialization at Barco, under the False Claims Act’s whistleblower provisions. These provisions allow private individuals to sue on behalf of the U.S. government and share in any recovery. The government has since intervened in the case.
The lawsuit seeks to recover financial losses and hold the defendants accountable for customs fraud, though officials emphasize that the allegations remain unproven at this stage. “The claims asserted by the United States are allegations only, and there has been no determination of liability,” the DOJ noted.
The case is currently being handled in U.S. District Court for the Eastern District of California
