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Pure Collection pays out $900,000 in US settlement

Cashmere brand Pure Collection has agreed to a settlement with the US government totalling more than $900,000 (£647,500), after a whistleblower alleged the company was evading custom duties.

An employee at the Harrogate-based retailer, Andrew Patrick, claimed that the company was evading duties on goods shipped from the UK to customers in the US.

Patrick worked for Pure Collection for four years until 2014, latterly in its packaging department.

He claimed he was told to split large orders into several parcels so they did not reach a $200 (£144) threshold, which has increased in recent years to $800 (£576).

Patrick brought his allegations to the attention of US Customs and Border Protection in 2014, and later filed a whistleblower submission with the US Internal Revenue Service in 2015. After two initial unsuccessful attempts he went to law firm Constantine Cannon in 2016. 

Law firm Constantine Cannon, which is representing Patrick, said he is the first person from the UK to claim that a British company has breached US customs controls.

The law firm said Pure Collection and its acting chief executive, Samantha Harrison, will pay a combined settlement of $908,100 (£653,300) to the US government. Patrick will receive 18% of the total settlement.

Patrick’s lawyers said the joint defendants “neither admitted nor denied liability”.

Constantine Cannon partner Mary Inman told Drapers: “Some employment and criminal lawyers don’t even know this, but British citizens can use the US programme. It’s amazing our client found us [in the first place].

“We’re definitely going to see more whistleblowers using the false claims act [and] the US whistleblower programme to bring forward allegations relating to customs violations.

“It could also extend to fraud, such as mislabelling clothing in terms of countries of origin – if clothing claims to be made in the UK, for example, but a part of it was made in a country that does not have tariffs with the US – or mislabelling product types that have lower tariffs.”

Pure Collection, which operates nine own-brand stores and is also stocked in John Lewis, could not be reached for comment.

Readers' comments (2)

  • This shows the power of whistleblowing. But Pure Collection is not the first fashion brand to be accused of such activity.
    Failure to abide by foreign laws can cause problems!
    Stephen Sidkin
    Chair
    Fashion Law Group
    Fox Williams LLP

    Unsuitable or offensive? Report this comment

  • This case shows the power of whistleblowing. But Pure Collection is not the first fashion brand to be accused of such activity.
    Failure to abide by foreign laws can cause problems!
    Stephen Sidkin
    Chair
    Fashion Law Group
    Fox Williams LLP

    Unsuitable or offensive? Report this comment

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