SoNo International LLC and Ark Capital Equipment LLC have agreed to jointly pay over $900,000 to the U.S. government to resolve allegations surrounding shipping containers that were made in China as opposed to government-specified countries, United States Attorney Jennifer Arbittier Williams announced on Thursday.
According to a Department of Justice (DOJ) release, the companies agreed to jointly pay a total of $904,000 to the federal government after they allegedly violated the False Claims Act.
Also called the “Lincoln Law,” the False Claims Act was enacted in 1863 in response to defense contractor fraud during the American Civil War and states that any individual who knowingly submits false claims to the administration is liable to pay double the amount in government damages as well as a $2,000 penalty for each false claim.
As per the DOJ, the United States Department of Defense (DoD) contracted for its agencies to materials made in America or in specified allied countries, such as South Korea.
However, SoNo, a Connecticut-based equipment trading and specialized consulting firm, and New York-based Ark both allegedly failed to follow through with that agreement.
Instead, both companies allegedly had an unnamed third-party company change the identifying plates on 100 shipping containers made in China to make them look as if they had been manufactured in South Korea.
On two other contracts, SoNo’s supplier used Chinese steel, the DOJ said.
Both companies also allegedly failed to detect the deception before providing the containers to the United States military.
“Americans have the right to know that their tax dollars are being spent to support American jobs and American policies,” said U.S. Attorney Williams. “When the Department of Defense purchased this material for our warfighters, SoNo agreed to acquire material from and support manufacturers in America or our allied nations. The United States Attorney’s Office is ready to investigate and punish contractors who do not follow these clear rules.”
SoNo and Ark, as part of the resolution with the federal government, have entered into an administrative agreement with the Defense Logistics Agency establishing “enhanced training and reporting requirements with respect to government procurement.”
The Epoch Times has contacted SoNo International for comment but was unable to reach Ark Capital Equipment.
Meanwhile, the third-party company that allegedly changed the identifying plates on the 100 shipping containers has reached a separate agreement with officials under which it will “provide training to its employees to enhance their compliance with Customs rules and regulations and improve their awareness of Buy American and other issues.”
The joint agreement comes amid ongoing tensions between China and the U.S., which have been further exasperated by the Chinese military’s “dangerous, provocative, and unjustified,” actions of building stronger electronic warfare facilities in the disputed South China Sea.