A Blaine auto brokerage will pay $430,000 to the U.S. Department of Justice as part of a lawsuit settling allegations that the company committed federal fraud by underreporting the value of vehicles it imported to avoid paying higher duty fees.
BidBuy Auctions LLC owner Whitney McElroy agreed to pay $430,000 to resolve claims that it purchased trucks in Canada and then lowered their value when importing them into the U.S., according to a February 7 press release from the U.S. Attorney’s Office in Western Washington. McElroy does not admit to wrongdoing under the terms of the settlement.
BidBuy has offices in Blaine and Surrey that service customers from Seattle to Vancouver, B.C., according to the company website.
The lawsuit was brought to the government’s attention when former employee Scott Hausman filed the False Claims Act lawsuit, wrote Hausman’s attorney Stephen Teller, of Teller Law, in an email to the All Point Bulletin. Hausman will receive 23 percent of the $430,000 settlement, or nearly $99,000, according to the release.
One example in the lawsuit showed BidBuy purchased a 2011 Dodge Ram truck for nearly $22,500 U.S. dollars but reported it as $9,600 U.S. dollars to U.S. Customs and Border Protection, saving BidBuy about $3,200 in duties. The lawsuit alleges BidBuy underreported over 80 vehicles.
In 2020, duties on imported foreign-made trucks increased 25 percent when the U.S. exited the North American Free Trade Agreement (NAFTA) and entered the U.S. Mexico Canada Agreement (USMCA).
“This conduct doesn’t just cheat the government out of revenue, it gives the business an advantage not enjoyed by other auto brokers who report their vehicle values honestly,” U.S. Attorney Nick Brown said in a statement. “This is an expensive lesson for BidBuy – one that could have been avoided if it followed the rules.”
BidBuy has five years to make payments, according to the DOJ.
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