Recently the Federal Trade Commission entered into a settlement under which Patriot LED must pay civil damages of nearly $158,000, plus a penalty of $2.96 million, for its alleged false marketing of lighting products as domestic products “Made in USA.” These lighting products encompass LED lights, tubes and fixtures, including a line of LED products – called “Patriot Tubes.” The settlement is pending approval in federal court.
Entities receiving federally funded projects as prime contractors, subcontractors, grantees or agreement holders, and those in their supply chain, may be required to supply products and construct facilities with materials that comply with the Buy American Act, Trade Agreements Act, Buy America, or other applicable domestic preference rules, unless an exception applies. Under these domestic preference rules, the end products, components and construction materials must be produced or manufactured in the U.S. or a qualifying country.
Misrepresentation of what will be delivered, or failure to deliver or install compliant products and materials, can result in civil or even criminal prosecution under the False Claims Act (FCA), in addition to other government claims. Damages under the FCA range from a minimum of $12,537 to a maximum of $25,076 per false claim, and those damages may be trebled. In addition to federal rules, states have similar domestic preference rules and false claims laws.
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