AJY International alleges supplier submitted false documents, seeks declaration it is not liable

By Charmaine Little | Aug 8, 2018

SAN FRANCISCO – On July 26, a California food distributor submitted a lawsuit in a U.S. district court against several U.S. government entities seeking declaration it is not liable for any alleged misdeeds after a Korean supplier allegedly provided false documents to the federal government.

SAN FRANCISCO – On July 26, a California food distributor submitted a lawsuit in a U.S. district court against several U.S. government entities seeking declaration it is not liable for any alleged misdeeds after a Korean supplier allegedly provided false documents to the federal government.

AJY International Inc. filed the action against the U.S. Department of Homeland Security, U.S. State Customs and Border Protection, U.S. Food and Drug Administration, U.S. Department of Agriculture and U.S. Justice Department seeking declaratory relief.

The plaintiff pointed out the foreign supplier it used doesn’t challenge the allegation that it filed possibly hundreds of false statements and claims to the U.S. government “for their conveniences and benefits.”

AJY said the conflict started between 2012 and 2013 when it imported roughly $3.8 million worth of food products from Korean manufacturers Korea Yakult Co. LTD and PaldoCo, LTD (formerly known as Samyoung Systems Co. LTD). 

During the process, the manufacturer allegedly gave AJY documents that contained false information. Still, AJY said it assumed the statements were true and in turn submitted them the U.S. government organizations. This resulted in millions of imported food products being sold in the U.S., potentially impacting millions of U.S. consumers. Yakult manufactured and distributed Paldo products in the U.S.

AJY alleged it was Paldo that actually falsified the documents. The illegal action came to light after AJY filed a lawsuit against the foreign manufacturer in 2017 and it subsequently admitted to providing AJY with about 1,500 false statements from 2012-2013. AJY in turn filed a second lawsuit, hoping to fix the statements and requested damages. That case is pending in the Alameda Superior Court.

In the meantime, AJY has taken the action to the district court, requesting a declaration that it’s not responsible for any injuries that come as a result of the foreign manufacturer’s activities. AJY also hoped to not be held responsible for any civil liabilities and consequences that come with giving false documents to the government.

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