Several RV makers are accusing a Canadian import broker of inflating currency exchange rates and overcharging them by millions of dollars.
This story by Jordan Fouts originally appeared in the Elkhart Truth.
The five companies said in a lawsuit against Winnipeg-based Frontier Supply Chain Solutions Inc. that the customs broker and consultant fraudulently bilked them out of millions of dollars. They claim the company also gave them bad advice on the Canadian goods and services tax, leading to tens of millions of dollars in tax reassessments by the Canada Revenue Agency.
Heartland RV of Elkhart, Keystone RV of Goshen, Airstream Inc. of Jackson Center, Ohio, and Cruiser RV and DRV, both of Howe, all say they were clients of the company and filed the complaint jointly in U.S. district court. They are seeking to recover damages as well as indemnification for the tax assessments.
According to the lawsuit, Frontier operates an RV import business through subsidiary Granya RV Importers Inc. Frontier approached the RV companies and offered the specialized help they needed to import their vehicles into Canada and to meet the regulatory requirements to sell in the country.
Frontier claimed it would structure the import arrangements to minimize brokerage charges and to seamlessly handle the payment, collection, reporting and remittance of Canadian Goods and Services Tax/ Harmonized Sales Tax. Canada Customs imposes a 5 percent tax before allowing commercial goods to be imported into Canada.
Among other things, Frontier told the companies how to register for GST/HST, how to charge and collect the tax from Canadian dealers and whether they could claim input tax credits from the Canadian government. The broker told them its recommendations were supported by a ruling from the Canada Revenue Agency and that it “had done due diligence and that it had the best plan,” according to the complaint.