Plastic-bag manufacturer settles allegations of customs fraud for $7.3M

New York-based RediBagUSA and CEO Jeffrey Rabiea have agreed to pay $7.3 million to settle a customs fraud investigation into whether the company misrepresented the country of origin on imported plastic retail and grocery checkout bags to avoid antidumping duties, according to the U.S. Department of Justice.

The settlement resolves allegations that RediBag USA, legally registered as New York Packaging II LLC, knew that plastic bags imported and distributed to customers across the United States were manufactured in China and transshipped through Hong Kong. Redi-Bag said on customs entry forms that the country of origin was Hong Kong, enabling it to evade a 77.5% duty assessed by the Commerce Department on bags being sold below market prices.

“Companies that benefit from access to U.S. markets must follow U.S. law, including by paying import duties that protect American manufacturers and workers from unfair foreign competition,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division, on Wednesday in a news release. “The Justice Department will hold accountable those who evade duties owed to the United States.”

RediBag offers reusable and single-use grocery and retail bags, liners and other industrial packaging.