Samsung to pay $2.3 million over claims of misleading feds

Electronics giant Samsung will pay $2.3 million to settle federal allegations that it misled the government to allow U.S. agencies to buy products made in China, in violation of the law. 

The assistant attorney general for the Justice Department’s Civil Division, Stuart Delery, said in a statement on Tuesday that the settlement “upholds important trade priorities by ensuring that the United States only uses its buying power to purchase from countries that trade fairly with us.”

ADVERTISEMENT
The General Services Administration (GSA), which handles contracts for much of the government, had previously negotiated a contract for Samsung to sell products to any federal agency. Under the terms of the deal, products needed to be produced either in the United States or another country with which the U.S. has a trade deal.

From 2005 to 2013, however, the Justice Department claimed the company violated that clause by telling resellers that products were made in countries like South Korea or Mexico — which are covered under the deal — when they were actually made in China, which is not covered. Resellers then allegedly passed the products along to the government.

“It is unacceptable to sell unauthorized foreign electronics to the United States,” GSA acting inspector general Robert Erickson said. “We expect all companies doing business with the federal government to comply with contracting laws.”

The case was originally brought by a Samsung employee under whistleblower provisions of the False Claims Act.