New York Packaging II LLC, operating as Redi-Bag USA, and its CEO Jeffrey Rabiea have agreed to pay $7.3 million to resolve False Claims Act allegations.
The settlement was reached with the U.S. Department of Justice and the District of New Jersey following an investigation into the company’s customs practices.
The government alleged that Redi-Bag USA imported polyethylene retail carrier bags manufactured in China while fraudulently listing Hong Kong as the country of origin on customs documents.
That misrepresentation was designed to sidestep antidumping duties of up to 77.57% imposed under Antidumping Duty Order A-570-886.
The alleged scheme went beyond paperwork manipulation, with employees reportedly directed to cover or remove “Made in China” markings from goods.
Previous orders that had been scheduled for customs inspection were also said to have been canceled deliberately to avoid detection by authorities.
The case originated with John Maierhoffer, a former contracted sales representative for Redi-Bag USA, who filed a qui tam complaint in federal court in 2021.
Maierhoffer’s position within the company gave him direct visibility into its sourcing and customs practices, providing the evidentiary foundation for federal investigators to pursue the matter.
As a result of the $7.3 million settlement, Maierhoffer is set to receive approximately $1.33 million as his relator’s share, representing roughly 18% of the total recovery.
U.S. Customs and Border Protection worked alongside the DOJ’s Civil Division in the investigation, reflecting the interagency coordination that has become increasingly common in customs-related False Claims Act cases.
The case illustrates how the False Claims Act extends to schemes designed to evade antidumping duties, a form of customs fraud that corrupts fair competition and denies the U.S. Treasury significant revenue.
Antidumping duties exist to protect domestic industries from artificially low-priced foreign imports, making their deliberate evasion a serious federal offence with wide economic consequences.
For prospective whistleblowers, the Redi-Bag resolution demonstrates the qui tam mechanism functioning as intended, with a single informed individual triggering a federal investigation that produced a multimillion-dollar public recovery.