Why This Matters to Distributors: The settlement shows how inaccurate country-of-origin declarations can produce multimillion-dollar liability under the False Claims Act. It also underscores the need for importers and distributors to verify sourcing records, customs declarations, and supplier documentation rather than relying solely on representations from overseas vendors.
New York Packaging II LLC, doing business as Redi-Bag USA, and its CEO, Jeffrey Rabiea, have agreed to pay $7.3 million to settle allegations that they evaded antidumping duties by falsely declaring Chinese-made plastic retail bags as products of Hong Kong, the U.S. Department of Justice said.
Redi-Bag, based in New Hyde Park, New York, supplies custom bags, liners and packaging to grocery, restaurant, deli, medical, retail, and industrial customers across the U.S. Rabiea is the company’s CEO and a part owner.
The government alleged that Redi-Bag and Rabiea misrepresented the country of origin of certain polyethylene retail carrier bags imported from Dec. 23, 2015, through July 13, 2018.
The bags were manufactured in China and shipped through Hong Kong, but Redi-Bag allegedly listed Hong Kong as their country of origin on customs entry forms. The declarations allowed the company to avoid antidumping duties that, when applicable, totaled as much as 77.57% of the value of qualifying Chinese-made bags.
Federal officials also alleged that Redi-Bag and Rabiea concealed the bags’ origin from the company’s customs broker and U.S. Customs and Border Protection. The alleged conduct included directing employees to cover “Made in China” markings, instructing the manufacturer to remove the markings and canceling orders after learning they would be inspected by customs authorities.
The settlement resolves a whistleblower lawsuit filed Nov. 22, 2021, by John Maierhoffer, a former contracted sales representative for Redi-Bag, in the U.S. District Court for the District of New Jersey.
The federal government partially intervened in the lawsuit for purposes of the settlement. It alleged that Redi-Bag and Rabiea violated the False Claims Act by using false records or statements to avoid paying money owed to the government and conspiring with others to do so.
Under the agreement, Redi-Bag and Rabiea will collectively pay the federal government $7.3 million, including $3.65 million classified as restitution. Interest accrues at an annual rate of 3.64% from May 1 through the payment date.
Redi-Bag is designated to pay $6.789 million, while Rabiea is designated to pay $511,000 individually. The payments are due within 30 days of the agreement’s effective date.
Both defendants remain jointly responsible for the full settlement amount if either designated payment is not made.
Maierhoffer will receive $1,332 million of the government’s recovery, plus a proportionate share of any accrued interest. Redi-Bag and Rabiea also agreed to pay him $225,000 for attorneys’ fees, expenses, and costs.
The settlement is not an admission of liability. Redi-Bag and Rabiea denied the government’s allegations and Maierhoffer’s claims. The agreement also states that the settlement is not a concession by the government that its claims were unfounded.
The Justice Department announced the settlement July 15. Rabiea signed the agreement on behalf of Redi-Bag and in his individual capacity July 10, according to the executed document.
The case comes as the Justice Department expands its enforcement efforts against companies accused of evading tariffs and customs duties. The department launched a cross-agency Trade Fraud Task Force in 2025 to coordinate civil and criminal investigations of tariff evasion, smuggling and other trade-related misconduct.
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