Two steel manufacturers based in Brampton, Ontario, along with one of their part owners, have agreed to pay a total of $26 million to resolve allegations brought by the U.S. Department of Justice. The companies were accused of circumventing duties on steel that originated from Asia and Europe by falsely claiming it came from Canada or the United States.
Details of the Settlement
Farjess Inc. and Royal Canadian Steel Inc., together with Feroz Jessani, who serves as part owner and president of both companies, will pay US$19 million in restitution. The settlement resolves claims that they evaded duties by misrepresenting the country of origin for certain flat-rolled steel products.
According to U.S. officials, the steel actually originated from China, Indonesia, Italy, Turkey, or Vietnam, not from Canada or the U.S. as the companies had declared.
Whistleblower Lawsuit
The settlement stems from a civil lawsuit filed by Shamsh Dhala, a broker who worked with Farjess Inc., under the whistleblower provision of the False Claims Act. The case was filed in the Eastern District of Michigan. Dhala will receive approximately US$3,610,000 of the settlement proceeds as a reward for exposing the fraud.
Under the False Claims Act, private individuals can sue on behalf of the U.S. government and share in any recovery.
Government Statements
“Import duties serve an important role in protecting our national interests generally and the American steel industry in particular,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department of Justice will zealously pursue anyone who fraudulently evades the duties owed on steel products imported into this country.”
Jonathan Restivo, acting director of the Center of Excellence and Expertise (CEE) for Base Metals, called the settlement record-setting. “This case sends a clear message that CBP, in partnership with our federal counterparts, will continue to uphold the rule of law and protect the interests of American businesses and consumers.”
Context of U.S. Tariffs
In February 2025, President Donald Trump announced a 25% tariff on Canadian steel, which was doubled to 50% in June under the Fair Trade Act. That law empowers the U.S. president to impose import restrictions or tariffs if certain goods are imported in quantities or under circumstances that threaten national security.
Royal Canadian Steel did not respond to a request for comment from the Toronto Sun.
