A British online clothing retailer, Pure Collection Ltd., has agreed to pay $875,538 to the US government to settle a whistleblower lawsuit brought by a UK resident that alleged Pure Collection engaged in a scheme to deliberately evade US customs duties from 2010 to 2017.

Pure Collection CEO Samantha Harrison will pay an additional $32,562 to settle allegations related to her role in the scheme.

The whistleblower who exposed the alleged fraud, Andrew Patrick, is the first UK resident to collect a reward under the False Claims Act, a US whistleblower law, for alleging customs evasion by a British company. He worked for Pure Collection from 2010 to 2014, first as a sales representative in its UK call center and then in its UK packaging department.

Patrick is represented by lead counsel Phillips & Cohen LLP, which was hired last year.

Patrick alleged in his qui tam lawsuit that Pure Collection engaged in a practice known as “splitting.” The company trained its employees to divide individual US orders into multiple shipping packages so that the retail value of the merchandise in each package would not trigger customs duties. From 2010 to 2016, packages with merchandise that had a retail value of less than $200 were allowed into the US duty free. In 2016, that limit was increased to $800.

“As an employee, I saw the steps Pure Collection was taking to avoid duties and believed the company was wrong to do so,” Patrick said. “By splitting packages, Pure Collection not only deprived the US of legitimate payments but effectively decreased the true price of its merchandise for US residents, which was unfair to US competitors and other retailers outside the US.”

Pure Collection, a private company, is based in Harrogate, North Yorkshire. It maintained a separate US website that advertised “We do our utmost to prevent customs fees.” The company also promised to reimburse US customers who had to pay customs duties on their packages.

“One of the company’s marketing pitches to US customers was a promise that they wouldn’t have to pay customs duties on the merchandise they bought from Pure Collection online,” said Molly Knobler, a whistleblower attorney at Phillips & Cohen who represents Patrick. “It was successful as a marketing strategy, but wrong as a company practice.”

Patrick tried several times on his own to get the US government to stop the practice. He first reported Pure Collection to US Customs and Border Protection and provided documents supporting his allegations to the US Embassy in London in 2014. Then he filed a whistleblower submission with the US Internal Revenue Service.

“Our client was very passionate about stopping the alleged fraud and on several occasions stuck his neck out to try to make that happen,” Knobler said.

It wasn’t until Patrick filed a qui tam lawsuit in 2016 in federal district court in Maine that the government investigated his allegations. The government joined his lawsuit in July 2017.

Anyone, no matter what the person’s nationality or location, can file a whistleblower lawsuit under the False Claims Act against an entity or individual that is defrauding the US government to recover funds on the government’s behalf. If the government joins the lawsuit and recovers funds as a result of the case, the whistleblower is awarded 15 percent to 25 percent of the amount recovered. Patrick will receive 18 percent of the recovery, or about $168,000.