Plastic-bag manufacturer settles allegations of customs fraud for $7.3M
Source
American Shipper
Post Date
07/24/2026
Justice Department said RediBagUSA misrepresented country of origin on China imports
New York-based RediBagUSA and CEO Jeffrey Rabiea have agreed to pay $7.3 million to settle a customs fraud investigation into whether the company misrepresented the country of origin on imported plastic retail and grocery checkout bags to avoid antidumping duties, according to the U.S. Department of Justice. The settlement resolves allegations that RediBag USA, legally registered as New York Packaging II LLC, knew that plastic bags imported and distributed to customers across the United States were manufactured in China and transshipped through Hong Kong. Redi-Bag said on customs entry forms that the country of origin was Hong Kong, enabling it to evade a 77.5% duty assessed by the Commerce Department on bags being sold below market prices. ?ompanies that benefit from access to U.S. markets must follow U.S. law, including by paying import duties that protect American manufacturers and workers from unfair foreign competition,?said Assistant Attorney General Brett A. Shumate of the Justice Department? Civil Division, on Wednesday in a news release. ?he Justice Department will hold accoun those who evade duties owed to the United States.?
RediBag offers reusable and single-use grocery and retail bags, liners and other industrial packaging. The U.S. Attorney for the District of New Jersey alleged that RediBag and Rabiea concealed the bags?true country of origin by hiding information from others, including the company? customs broker and U.S. Customs and Border Protection, by directing employees to cover up ?ade in China?markings, directing the manufacturer to remove ?ade in China?markings and canceling orders after learning they would be inspected by customs authorities. The settlement resolves a civil lawsuit filed by John Maierhoffer, a former contracted sales representative for RediBag, under whistleblower provisions of the False Claims Act. As part of the resolution, Maierhoffer will receive more than $1.3 million of the settlement proceeds. Last year, the Department of Justice under President Donald Trump launched a Trade Fraud Task Force to enhance enforcement of rules designed to protect government revenues, economic and national security, and consumers.
