Settlement Agreement — New York Packaging II LLC d/b/a Redi-Bag USA, Jeffrey Rabiea (John Maierhoffer, Relator)

Summary

The United States, acting for U.S. Customs and Border Protection, settled False Claims Act claims against New York Packaging II LLC d/b/a Redi-Bag USA and its CEO Jeffrey Rabiea for $7,300,000, of which $3,650,000 is restitution. The United States contends that from December 23, 2015 through July 13, 2018 the company misrepresented Hong Kong as the country of origin of polyethylene retail carrier bags manufactured in the People's Republic of China, evading duties under Antidumping Duty Order No. A-570-886 of up to 77.57%. Relator John Maierhoffer filed the Civil Action on November 22, 2021 in the District of New Jersey, Civil No. 21-20170. New York Packaging pays $6,789,000 and Rabiea $511,000; the United States pays the relator $1,332,250, and the New York Packaging Defendants pay the relator $225,000 for attorneys' fees, expenses and costs.

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SETTLEMENT AGREEMENT

This Settlement Agreement (““Agreement’’) is entered into among the United States of
America, acting through the United States Department of Justice and on behalf of United States
Customs and Border Protection (“CBP”) (collectively, the “United States”), New York
Packaging II LLC d/b/a Redi-Bag USA (“New York Packaging”’) and Jeffrey Rabiea (together,
the “New York Packaging Defendants”), and John Maierhoffer (“Relator”) (the United States,
the New York Packaging Defendants, and Relator hereafter collectively referred to as the
Parties”), through their authorized representatives.

RECITALS

A. New York Packaging is a New York company headquartered in New Hyde Park,
New York that supplies custom bags, liners, and packaging to grocery, restaurant, deli, medical,
and other retail and industrial customers across the United States. Jeffrey Rabiea is New York
Packaging’s CEO and a part-owner of the company.

B. On November 22, 2021, Relator filed a gui tam action in the United States District
Court for the District of New Jersey captioned United States ex rel. Maierhoffer v. New York
Packaging IT LLC, et al., Civil No. 21-20170 (SDW) (JSA), pursuant to the gui tam provisions of
the False Claims Act, 31 U.S.C. § 3730(b) (the “Civil Action’). The United States is partially
intervening in the Civil Action for the purposes of settlement.

C. The United States contends that it has certain civil claims against the New York
Packaging Defendants for allegedly knowingly engaging in the following conduct from
December 23, 2015, through July 13, 2018:

The New York Packaging Defendants misrepresented the country of origin of

certain polyethylene retail carrier bags (“PRCBs”) on customs forms at

importation into the United States. Specifically, the New York Packaging
Defendants knew that certain PRCBs that they imported into the United States
had been manufactured in the People’s Republic of China (“PRC”) and
transshipped through Hong Kong. The New York Packaging Defendants
nevertheless misrepresented on customs entry forms that the country of origin of
these PRCBs was Hong Kong, thus evading duties assessed by the United States
under Antidumping Duty Order No. A-570-886 (“ADD Order’) if the PRCBs met
certain size and use specifications. When applicable, the ADD Order imposed an
antidumping duty of up to 77.57% on the value of PRCBs manufactured in the
PRC and imported into the United States.

The New York Packaging Defendants further concealed the PRCBs’ true country
of origin by hiding information from others, including New York Packaging’s
customs broker, and by extension, CBP, including by directing employees to
cover up “Made in China” markings, directing the manufacturer to remove “Made
in China” markings, and directing the cancelation of orders after learning the
orders would be inspected by customs authorities.

This conduct is referred to below as the “Covered Conduct.”

As a consequence of the Covered Conduct, the United States contends that the New York
Packaging Defendants knowingly made, used, or caused to be made or used false records or
statements material to obligations to pay or transmit money to the United States, or knowingly
concealed or knowingly and improperly avoided or decreased such obligations, in violation of
the False Claims Act, 31 U.S.C. § 3729(a)(1)(G), and that they conspired with others to do so, 31
U.S.C. § 3729(a)(1)(C).

D. This Settlement Agreement is neither an admission of liability by the New York
Packaging Defendants nor a concession by the United States that its claims are not well founded.
The New York Packaging Defendants deny the United States’ allegations in Paragraph C and the
Relator’s allegations in the Civil Action.

E. Relator claims entitlement under 31 U.S.C. § 3730(d) to a share of the proceeds of
this Settlement Agreement and to Relator’s reasonable expenses, attorneys’ fees and costs.

To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the
above claims, and in consideration of the mutual promises and obligations of this Settlement

Agreement, the Parties agree and covenant as follows:
TERMS AND CONDITIONS

1. The New York Packaging Defendants shall collectively pay to the United States
$7,300,000, of which $3,650,000 is restitution, plus interest at a rate of 3.64% per annum from
May 1, 2026, and continuing until and including the date of payment (the “Settlement Amount’),
as follows:

a. New York Packaging shall pay to the United States $6,789,000 plus accrued
interest as set forth above no later than 30 days after the Effective Date of this
Agreement by electronic funds transfer pursuant to written instructions to be
provided by the Civil Division of the United States Department of Justice.

b. Jeffrey Rabiea shall pay to the United States $511,000 plus accrued interest as set
forth above no later than 30 days after the Effective Date of this Agreement by
electronic funds transfer pursuant to written instructions to be provided by the
Civil Division of the United States Department of Justice.

Notwithstanding the foregoing, New York Packaging and Jeffrey Rabiea agree that each is
jointly and severally liable for the entire Settlement Amount, and that if any of the above
payments (or portions thereof) is not received from the payor identified above, any unpaid
payment or portion is and remains a joint and several obligation of both New York Packaging
and Jeffrey Rabiea.

2. Conditioned upon the United States receiving the Settlement Amount and as soon
as feasible after receipt, the United States shall pay $1,332,250, plus a proportionate share of any
interest, to Relator by electronic funds transfer (““Relator’s Share”). No other relator payments
shall be made by the United States with respect to the matters covered by this Agreement.

3. The New York Packaging Defendants agree to pay a total of $225,000 to Relator
pursuant to 31 U.S.C. § 3730(d) in satisfaction of attorneys’ fees, expenses, and costs incurred by
Relator in connection with the Civil Action by no later than 30 days after the Effective Date.
Payment under this paragraph shall be made by electronic funds transfer pursuant to instructions
provided by Relator’s counsel.

4. Subject to the exceptions in Paragraph 6 below, and upon the United States’
receipt of the Settlement Amount plus interest due under Paragraph 1, the United States releases
the New York Packaging Defendants, together with New York Packaging’s current and former
parent corporations, direct and indirect subsidiaries, brother or sister corporations, divisions,
current or former corporate owners, and the corporate successors and assigns of any of them,
from any civil or administrative monetary claim the United States has for the Covered Conduct
under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Tariff Act of 1930, 19 U.S.C. §§ 1592
and 1595a, as amended; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; or the
common law theories of payment by mistake, unjust enrichment, and fraud.

5. Subject to the exceptions in Paragraph 6 below, and upon the United States’
receipt of the Settlement Amount, Relator, for himself and for his heirs, successors, attorneys,
agents, and assigns, releases the New York Packaging Defendants, together with New York
Packaging’s current and former parent corporations, direct and indirect subsidiaries, brother or
sister corporations, divisions, current or former corporate owners, insurers and reinsurers, and the
corporate successors and assigns of any of them, from any civil monetary claim the Relator has
on behalf of the United States for the Covered Conduct under the False Claims Act, 31 U.S.C. §§

3729-3733.
6. Notwithstanding the releases given in Paragraphs 4 and 5 of this Agreement, or

any other term of this Agreement, the following claims and rights of the United States are

specifically reserved and are not released:

a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code);

b. Any criminal liability;

C. Except as explicitly stated in the Agreement, any administrative liability
or enforcement right, or any administrative remedy, including the
suspension and debarment rights of any federal agency;

d. Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct;

e. Any liability based upon obligations created by this Agreement;

f. Any liability of individuals other than Jeffrey Rabiea;

g. Any liability for express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services;

h. Any liability for failure to deliver goods or services due;

1. Any liability for personal injury or property damage or for other
consequential damages arising from the Covered Conduct.

7. Relator and his heirs, successors, attorneys, agents, and assigns shall not object to

this Agreement but agree and confirm that this Agreement is fair, adequate, and reasonable under

all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B). Conditioned upon Relator’s receipt

of the Relator’s Share, Relator and her heirs, successors, attorneys, agents, and assigns fully and

finally release, waive, and forever discharge the United States, its agencies, officers, agents,
employees, and servants, from any claims arising from the filing of the Civil Action or under 31
U.S.C. § 3730, and from any claims to a share of the proceeds of this Agreement and/or the Civil
Action.

8. Except as provided in Paragraph 3 above and as provided in the final sentence of
this paragraph, Relator, for himself, and for his heirs, successors, attorneys, agents, and assigns,
and on behalf of Mustang Marketing Group LLC, fully and finally releases the New York
Packaging Defendants, and their current and former directors, managers, officers, agents, and
employees, together with New York Packaging’s current and former parent corporations, direct
and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate
owners, and the corporate successors and assigns of any of them, from all claims of any kind
(including attorneys’ fees, costs, and expenses of every kind and however denominated), known
or unknown, accrued or not yet accrued, arising from any conduct occurring prior to the
Effective Date of this Agreement, including specifically any liability to Relator arising under the
False Claims Act, 31 U.S.C. §§ 3729-3733, including but not limited to all allegations in the
Civil Action and the contentions in the Covered Conduct, or under 31 U.S.C. § 3730(d) for
expenses or attorneys’ fees and costs. The releases provided in this paragraph shall not extend
to any claims, counterclaims or defenses that have been alleged in the following cases: New York
Packaging II, LLC v. Mustang Marketing Group, LLC, et al., Case No. 2:21-cv-01629
(E.D.N.Y.); New York Packaging II, LLC v. Daryl Danielowicz and John Maierhoffer, Case No.
604169/2024 (N.Y. Sup. Ct.); and New York Packaging II, LLC v. John Maierhoffer and
Mustang Marketing Group LLC, Case No. 615114/2025 (N.Y. Sup. Ct.) (collectively, the “Non-
Released Cases”), nor shall they modify or eliminate any rights or obligations under the

settlement agreement dated February 10, 2025 between and among Mustang Marketing Group
LLC, John Maierhoffer and New York Packaging II, LLC d/b/a Redibag USA (the “Clay County
Settlement Agreement”).

9. The New York Packaging Defendants waive and shall not assert any defenses
they may have to any criminal prosecution or administrative action relating to the Covered
Conduct that may be based in whole or in part on a contention that, under the Double Jeopardy
Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the
Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal
prosecution or administrative action.

10. The New York Packaging Defendants fully and finally release the United States,
its agencies, officers, agents, employees, and servants, from any claims (including attorneys’
fees, costs, and expenses of every kind and however denominated) that they have asserted, could
have asserted, or may assert in the future against the United States, its agencies, officers, agents,
employees, and servants, related to the Covered Conduct or the United States’ investigation or
prosecution thereof.

11. Except as provided in the final sentence of this paragraph, the New York
Packaging Defendants and their current and former directors, managers, officers, agents, and
employees, together with New York Packaging’s current and former parent corporations, direct
and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate
owners, and the corporate successors and assigns of any of them, fully and finally release the
Relator and Mustang Marketing Group LLC from all claims of any kind (including attorneys’
fees, costs, and expenses of every kind and however denominated), known or unknown, accrued
or not yet accrued, arising from any conduct occurring prior to the Effective Date of this

Agreement, including but not limited to any liability to New York Packaging Defendants related
to all allegations in the Civil Action and the contentions in the Covered Conduct and the
Relator’s investigation and prosecution thereof. The releases provided in this paragraph shall not
extend to any claims, counterclaims or defenses that have been alleged in the Non-Released
Cases, nor shall they modify or eliminate any rights or obligations under the Clay County
Settlement Agreement.

12. a. Unallowable Costs Defined: All costs (as defined in the Federal
Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of the New York
Packaging Defendants, and their present or former officers, directors, employees, shareholders,
and agents in connection with:

(1) the matters covered by this Agreement;

(2) the United States’ audit(s) and civil and any criminal investigation(s) of
the matters covered by this Agreement;

(3) the New York Packaging Defendants’ investigation, defense, and
corrective actions undertaken in response to the United States’ audit(s) and
civil and any criminal investigation(s) in connection with the matters
covered by this Agreement (including attorneys’ fees);

(4) the negotiation and performance of this Agreement;

(5) the payments the New York Packaging Defendants make to the United
States pursuant to this Agreement and any payments that the New York
Packaging Defendants may make to Relator, including costs and attorneys
fees,

are unallowable costs for government contracting purposes (hereinafter referred to as

Unallowable Costs).
b. Future Treatment of Unallowable Costs: Unallowable Costs will be
separately determined and accounted for by the New York Packaging Defendants, and the New
York Packaging Defendants shall not charge such Unallowable Costs directly or indirectly to any
contract with the United States.

C. Treatment of Unallowable Costs Previously Submitted for Payment:
Within 90 days of the Effective Date of this Agreement, the New York Packaging Defendants
shall identify and repay by adjustment to future claims for payment or otherwise any
Unallowable Costs included in payments previously sought by the New York Packaging
Defendants or any of their subsidiaries or affiliates from the United States. The New York
Packaging Defendants agree that the United States, at a minimum, shall be entitled to recoup
from the New York Packaging Defendants any overpayment plus applicable interest and
penalties as a result of the inclusion of such Unallowable Costs on previously-submitted requests
for payment. The United States, including the Department of Justice and/or the affected
agencies, reserves its rights to audit, examine, or re-examine the New York Packaging
Defendants’ books and records and to disagree with any calculations submitted by the New York
Packaging Defendants or any of their subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by the New York Packaging Defendants, or the effect of
any such Unallowable Costs on the amount of such payments.

13. This Agreement is intended to be for the benefit of the Parties only.

14. Upon receipt of the payments described in Paragraph | and Paragraph 3 above,
the United States and Relator shall promptly sign and file in the Civil Action a Joint Stipulation
of Dismissal of the Civil Action pursuant to Rule 41(a)(1). For the United States, the dismissal

will be with prejudice as to the New York Packaging Defendants as to the Covered Conduct
released by the United States in the Settlement Agreement, but otherwise will be without
prejudice, including as to any other defendant in the Civil Action. For the Relator, the dismissal
will be with prejudice as to all claims and all defendants in the Civil Action.

15. Each Party shall bear its own legal and other costs incurred in connection with
this matter, including the preparation and performance of this Agreement.

16. Each Party and signatory to this Agreement represents that it freely and
voluntarily enters into this Agreement without any degree of duress or compulsion.

17. This Agreement is governed by the laws of the United States. The exclusive
jurisdiction and venue for any dispute relating to this Agreement is the United States District
Court for the District of New Jersey. For purposes of construing this Agreement, this Agreement
shall be deemed to have been drafted by all Parties to this Agreement and shall not, therefore, be
construed against any Party for that reason in any subsequent dispute.

18. This Agreement constitutes the complete agreement between the Parties. This
Agreement may not be amended except by written consent of the Parties.

19. The undersigned counsel represent and warrant that they are fully authorized to
execute this Agreement on behalf of the persons and entities indicated below.

20. This Agreement may be executed in counterparts, each of which constitutes an
original and all of which constitute one and the same Agreement.

21. This Agreement is binding on each of the New York Packaging Defendants’
successors, transferees, heirs, and assigns.

22. This Agreement is binding on Relator’s successors, transferees, heirs, and assigns.

23. All parties consent to the United States’ disclosure of this Agreement, and

information about this Agreement, to the public.
24. This Agreement is effective on the date of signature of the last signatory to the
Agreement (“Effective Date”). Facsimiles of signatures shall constitute acceptable, binding
signatures for purposes of this Agreement.

[SIGNATURE PAGES FOLLOW]
THE UNITED STATES OF AMERICA

DATED: af: 2/ ZL = — —
avid Simunovich

DATED: alg [20% BY:

DATED:

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BY:

Assistant U.S, Attorney
United States Attorney's Office for the
District of New Jersey

Ga hole

Trial Attorney
Commercial Litigation Branch
Civil Division. United States Department of Justice

Digitally signed by
PATRICIA PATRICIA MCCARTHY

Patricia McCarthy

Director

Commercial Litigation Branch

Civil Division, United States Department of Justice
THE NEW YORK PACKAGING DEFENDANTS

~
DATED: July 10, 2026 BY: Sa

JelihRakies—Efffer Executive Officer
On behalf of New York Packaging

DATED: July 10,2026 py,

Jeffrey Rahiea
In his individual capacity

DATED: July 10, 2026 BY: -etar ay Babluwun

Peter Baldwin
Counsel for New York Packaging and Jeffrey Rabiea
JOHN MAIERHOFFER (RELATOR)

For himself and for Mustang Marketing Group LLC

Bruce C. Judge
Counsel for Relator John Maierhoffer


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