KNOXVILLE — Echelon Fitness Multimedia, LLC has agreed to pay at least $2.1 million to resolve allegations it violated the False Claims Act by undervaluing imported fitness equipment to reduce tariff obligations, federal officials announced.
The Chattanooga-based company, which sells connected exercise equipment such as smart bikes, treadmills and rowing machines, as well as digital fitness memberships, was accused of submitting inaccurate import documentation to U.S. Customs and Border Protection over a period spanning September 2019 through January 2023.
According to court filings, federal authorities alleged Echelon underreported the cost of equipment purchased from a China-based manufacturer and failed to include the value of computer tablets packaged with the equipment when declaring imports. Those omissions allegedly reduced tariffs and other import-related fees owed to the United States.
The settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act by Greg Dahlstrom in the U.S. District Court for the Eastern District of Tennessee. The case, titled U.S. ex rel. Greg Dahlstrom v. Echelon Fitness Multimedia, LLC et al., allowed Dahlstrom to bring claims on behalf of the federal government.
As part of the agreement, Dahlstrom will receive $420,000 from the settlement proceeds, with the possibility of additional compensation as permitted under federal law.
The case was handled by Assistant U.S. Attorneys Alan G. McGonigal and Alexa Ortiz Hadley, with assistance from the Department of Homeland Security Office of Inspector General.
Federal officials said the resolution underscores the government’s continued focus on combating fraud, waste and abuse affecting federal programs and revenue collection. Authorities also encouraged individuals to report suspected fraud through the Department of Homeland Security’s hotline.
The allegations resolved in the settlement are claims only, and there has been no determination of liability.
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