Redi-Bag USA to Pay $7.3 Million to Resolve False Claims Act Alle

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 brought by the U.S. Department of Justice and the District of New Jersey. According to the government’s allegations, the company imported polyethylene retail carrier bags manufactured in China while fraudulently listing Hong Kong as the country of origin on customs entry documents, a misrepresentation 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: employees were reportedly directed to cover or remove “Made in China” markings from goods and previous orders scheduled for customs inspection were canceled to avoid detection.

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 insider position gave him visibility into the company’s sourcing and customs practices, and his lawsuit provided the evidentiary foundation that enabled federal investigators to pursue the matter. As a result of the $7.3 million settlement, he is set to receive approximately $1.33 million as his relator’s share — roughly 18% of the total recovery.

This case illustrates how the False Claims Act extends to schemes designed to evade antidumping duties, a variety of customs fraud that corrupts fair competition and denies the U.S. Treasury revenue. U.S. Customs & Border Protection’s role in the investigation alongside DOJ’s Civil Division reflects the interagency coordination that has become increasingly common in customs-related FCA matters.

For prospective whistleblowers, the Redi-Bag resolution is a concrete example of the qui tam mechanism functioning as intended: a single individual with knowledge that would otherwise remain hidden within a private company triggered a federal investigation, produced a multimillion-dollar public recovery, and received a substantial financial award in return.