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Pure Collection to pay more than 900,000 USD in US custom duties settlement

By Vivian Hendriksz


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London - British online fashion retailer Pure Collection Ltd., has agreed to a settlement of 875,538 USD (630,737 pounds), to the US government after a whistleblower alleged the online retailer was engaged in a scheme to deliberately evade US customs duties. In addition, the CEO of Pure Collection, Samantha Harrison, has agreed to pay an additional 32,562 USD (23,457 pounds) to settle allegations linked to her role in the scheme.

Andrew Patrick, an employee at the Harrogate-based retailer, is the first UK resident to collect a reward under the False Claim Act, a US whistleblower law, after raising claims that the retailer was evading customers duties on goods shipped from the UK to the US. He previously worked for Pure Collection from 2010 to 2014, first as a sales representative and then in its UK packaging department. Patrick claimed he was instructed to split larger orders to the US into several shipping packages, so the total retail value of the products would remain under the 200 USD (144 pounds) limit set in place at the time and not trigger custom duties. In 2016, the limit was increased to 800 US dollars (576 pounds).

Pure Collection settles US custom duties evasion lawsuit

“As an employee, I saw the steps Pure Collection was taking to avoid duties and believed the company was wrong to do so,” Patrick said in a statement. “By splitting packages, Pure Collection not only deprived the US of legitimate payments but effectively decreased the true price of its merchandise for US residents, which was unfair to US competitors and other retailers outside the US.” At the time Pure Collection operated a separate US website which advertised that they did their ‘utmost to prevent customs fees,’ promising to reimburse US customers who had to pay custom duties on their packages.

Patrick first brought his allegations against Pure Collection to the attention of the US Customs and Border Protection in 2014 and filed a whistleblower submission with the US Internal Revenue Service a year later. However, it was not until 2016 when he filed a lawsuit with law firm Constantin Cannon in a federal district court that the US government investigated his allegations, joining his lawsuit in July 2017. “The False Claims Act is a powerful way to get the government’s attention when a person is aware that the US is being defrauded and wants to stop it,” Patrick said. If the government joins the lawsuit and recovers funds as a result of the case, the whistleblower is awarded 15 to 25 percent of the amount recovered. Patrick is set to receive 18 percent of the recovered amount, equal to 168,000 USD (121,027 pounds).

FashionUnited reached out to Pure Collection, which currently owns nine stores and is stocked in John Lewis, for additional commentary.

Photos: Pure Collection, website

Pure Collection