Centric Parts: The Settlement Debt Bankruptcy Didn’t Erase

In the Centric Parts customs settlement, CWD, LLC, operating as Centric Parts, agreed to pay $8 million to resolve allegations of brake-pad misclassification and concealment of past false entry documents. The government’s account reaches from the parts arriving at the border to the decision officials allegedly made when confronted about their classifications. If you knew the products or heard the discussion about old entries, this is a case about both kinds of knowledge.

The Justice Department announced the settlement on July 22, 2020. Centric, headquartered in Carson, sold aftermarket brake and chassis components for passenger vehicles and trucks. It imported brake parts and was responsible for submitting entry documents to U.S. Customs and Border Protection and paying the duties owed. The settlement resolved allegations under the False Claims Act.

Mounted Brake Pads Declared as Unmounted

The United States alleged that Centric declared mounted brake pads as unmounted brake pads from 2007 to 2017. The distinction changed the duty bill: mounted pads carried a 2.5% tariff, while unmounted pads required no tariff, according to the announcement. The government alleged that the false statements and omissions let Centric evade millions of dollars in duties.

The allegation describes HTS misclassification fraud in a form a parts employee could recognize: the imported product and its declared category tell different stories. The importer supplies the classification and duty rate on its entry. Someone who knows what the business actually bought or handled can help connect that declaration to the goods.

The 2024 World Customs Journal paper Customs Tariff Classification and the Use of Assistive Technologies explains why that commercial knowledge matters. Classification distinguishes goods by characteristics including their shape, form, use, composition and production stage. The paper describes companies linking tariff codes to product identifiers such as catalog numbers and stock keeping units. A product reference can therefore connect the item a parts employee knows to the customs treatment applied to it.

The paper also records a circular justification for reusing a tariff classification:

We would want more than last time’s paperwork to explain this time’s duty bill. An employee’s knowledge of what was purchased or handled can help test the classification that kept appearing on the paperwork.

The alleged cost advantage is plain. An honest importer has to include the duty in its costs. An importer evading that duty keeps money owed to the government. We see that as a competitive advantage financed by taxpayers, one of the recurring costs of customs fraud. The wider pattern of conflicting product descriptions starts with that same comparison between the commercial article and the declaration.

The Decision After the Confrontation

The government alleged that company officials were confronted with the misclassifications in 2017 and decided to conceal the past false entry documents rather than disclose them to Customs. That allegation gives an insider a second part of the story to explain: what officials learned about the old declarations and what they chose to do with that information.

We connect the product knowledge and the account of that decision to the affected entries and the duties left unpaid. The government’s account is pointed: officials allegedly responded to a classification problem by burying the paperwork that showed it.

Known customs errors left uncorrected also featured in the case against Grosfillex. In its July 2025 announcement, the Justice Department alleged that the furniture company left earlier customs forms uncorrected after learning they were false. The products differed, but both cases put a later company decision about old forms at the center of an unpaid-duty allegation.

Two Former Employees Brought the Cases

The Centric settlement resolved two qui tam lawsuits brought by former employees, one in Los Angeles and one in Detroit. The announcement said the whistleblowers would receive a combined $1.48 million as their share of the settlement. Customs and Homeland Security Investigations investigated the Los Angeles case.

These cases concerned money the government was owed on imports. As the announcement explains, the False Claims Act allows private parties to bring a case on the government’s behalf when a defendant knowingly avoids an obligation to pay it. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Settlement Obligation Stayed With the Reorganized Company

According to the Justice Department, Centric had filed for bankruptcy protection, but the bankruptcy court confirmed a reorganization plan that expressly kept the settlement debt payable by the reorganized company. We see a straightforward point in that provision: the business could reorganize, but it still had this settlement to pay.

What the Parts Employee Can Explain

The useful evidence connects the parts, entries, duty payments and company decisions. A product reference tied to an entry may show how the goods were classified, while correspondence about a challenged classification may explain what the people responsible knew. We work with the insider who can explain how those records fit the actual business.

The commercial invoice, bill of lading and entry summary are created at different times, often by different parties. Comparing them can reveal where the description changed. For a parts employee, the useful account is specific to the shipment: the product the business bought, the description sent for entry and the duty treatment that followed. Those are the connections we examine with you, alongside any later discussion about the classification.

The classification paper describes recordkeeping systems that link products to codes and support corrections to past declarations. If you handled the goods or saw a decision about earlier duty payments, your knowledge can give those records their meaning.

You Know the Parts and the Decisions

If the brake parts you handled did not match the customs description, or you saw officials bury a problem with old entries, speak with our Whistleblower Experts about the unpaid brake-pad duties. Your product knowledge and account of the decisions inside the business are where we start building your strongest customs whistleblower case. We stay at your side and match the case with customs fraud whistleblower lawyers who know classification disputes and the duty payments at stake.