FOLLOW US

Audio powerhouse Harman International Industries Inc. has agreed to pay $11.8 million to resolve accusations that it spent more than a decade sidestepping U.S. antidumping and countervailing duties on aluminum-based electronic components imported from China—an alleged scheme federal prosecutors say tilted the playing field and violated trade laws designed to protect domestic manufacturers.

Audio Giant Accused of Evading Duties for a Decade

Harman, best known for its audio brands Harman Kardon, JBL and Mark Levinson, allegedly imported heat sinks containing extruded aluminum from a Chinese supplier between June 2011 and March 2023 without declaring that the products were subject to steep federal trade duties. According to a Nov. 26 U.S. Department of Justice announcement, those duties were imposed to counteract unfair foreign subsidies and artificially low-priced imports.

U.S. Attorney for the Eastern District of Michigan Jerome F. Gorgon Jr. said the misconduct distorted the marketplace.

“For more than a decade, Harman knowingly evaded duties designed to prevent unfair foreign subsidies and trade practices,” Gorgon said. “We will use the law to protect American companies against cheaters. And when we catch them, they will pay for it.”

Settlement Filed in Federal Court

Court filings show Harman will pay $11,809,628, including $5,728,034.24 in restitution. The settlement stems from a False Claims Act case filed by whistleblower Jesrel Mitre, a Harman customs compliance and logistics specialist who said he uncovered the duty-avoidance problem shortly after being assigned to heat-sink import operations in 2018.

Mitre’s September 2020 complaint alleged that the heat sinks did not qualify for exemptions under a 2011 U.S. Department of Commerce antidumping and countervailing duty order covering a wide range of Chinese aluminum extrusions. Although some finished heat sinks are exempt, Mitre maintained that Harman’s products fell squarely within the tariff-covered category.

Mitre said he urged company leadership to disclose the issue to U.S. Customs but claimed no action was taken. Under the settlement, he will receive $2,302,877.46 as his relator share.

Harman Denies Wrongdoing as Case Closes

Despite paying the multimillion-dollar settlement, Harman continues to deny the allegations, according to the agreement. The company did not respond to requests for comment.

Counsel

• Federal government: Anthony Gentner, U.S. Attorney’s Office for the Eastern District of Michigan

• Harman: Ted Murphy and Frank R. Volpe, Sidley Austin LLP

The settlement brings a dramatic close to a long-running dispute that underscores the high stakes of U.S. trade enforcement and the growing willingness of insiders to expose alleged misconduct—no matter how powerful the company involved.