CHATTANOOGA, Tenn. — A Chattanooga-based fitness company has agreed to pay at least $2.1 million to settle allegations that it improperly reduced tariffs and other import assessments by undervaluing fitness equipment brought into the United States.
Echelon Fitness Multimedia, LLC, which sells connected fitness equipment such as smart bikes, treadmills and rowers and provides digital memberships with live and on-demand classes, agreed to settle allegations under the False Claims Act.
The company is accused of deceptively undervaluing imported equipment to lessen tariff obligations and other import assessments owed to the United States.
According to filed documents, the allegations involve conduct from September 2019 through January 2023.
During that period, Echelon allegedly knowingly submitted inaccurate invoices to U.S. Customs and Border Protection that underreported the cost of equipment purchased from a China-based manufacturer-assembler.
The company also allegedly repeatedly failed to include the cost of computer tablets incorporated into packaged equipment shipped from China to the United States when declaring the total values of the imported equipment to CBP.
The civil settlement resolves a case filed in the U.S. District Court for the Eastern District of Tennessee under the qui tam, or whistleblower, provisions of the False Claims Act by relator Greg Dahlstrom.
Under the settlement, Dahlstrom will receive $420,000 of the proceeds and possibly additional sums as permitted under the False Claims Act.