Whistleblower Former Employee Gets Six-Figure Settlement from Maker of Auto Accessories

A former employee who alleged in a lawsuit that Yakima Products Inc. was violating the law when exporting materials from China will receive a substantial payment following the manufacturer’s settlement with the federal Department of Justice. In this qui tam litigation, the whistleblower claimed that Yakima, which makes auto accessories, did not pay duties that it owed on the materials for a period of approximately 10 years.

According to U.S. Attorney Tessa M. Gorman, the Lake Oswego, Oregon company failed to take action when they were notified that were not making the legally mandated payments, giving the company an advantage over competitors that were following the law. As a result, Yakima agreed to a settlement of $3 million, of which $1.35 million is restitution for the unpaid duties. 

The qui tam provision of the False Claims Act gives someone aware of fraud against the government the opportunity to stand in for the United States by filing a lawsuit against the alleged offender. If the government is successful in recovering funds from the individual or company, the qui tam whistleblower can earn a percentage of the funds. Relators have collected billions of dollars in these cases since the law was introduced in the 1980s.  

Here, Yakima was using extruded aluminum from China in the production of some of its products, which include roof boxes and bicycle racks that are attached to cars. Though Yakima did not admit wrongdoing in the settlement, the relator will receive 17 percent of the $3 million settlement, plus $75,000 for their legal fees.  

Companies need to be aware that in cases such as this what they are eventually required to pay when a whistleblower files a claim might very well exceed the amount involved in the alleged fraud. Accordingly, qui tam actions should be taken very seriously and handled with the guidance of an attorney experienced in these types of matters. 

If you have information about a fraud against the government, you might be able to collect substantial compensation by serving as a whistleblower in a qui tam lawsuit, there is no time to waste. Contact the Kardell Law Group today to get an honest assessment of the situation from a lawyer with extensive experience in this area.