United States Agrees to Intervene in False Claims Lawsuit Against Japanese and US Companies

Last week, the Department of Justice announced its decision to intervene in a False Claims Act lawsuit against Japanese company Toyo Ink Manufacturing Co. Ltd. and its three US subsidiaries.  The subsidiaries are Toyo Ink International Corp., located in New York; Toyo Ink America LLC, located in Illinois; and Toyo Ink Manufacturing America LLC, located in New Jersey.  Toyo Ink is the world’s leading printer ink provider with operations across the globe.

According to the allegations, the Toyo Ink companies knowingly lied about the country of origin on customs documents in order to avoid paying antidumping and countervailing duties on imports of a certain type of ink, CVP-23.  Companies who import CVP-23 from China and India have been required to pay these taxes since 2004.  Toyo Ink allegedly listed Japan and Mexico, countries that the United States does not require these taxes for, as the countries of origin for its CVP-23 ink.  By doing this, they were allegedly able to avoid the import taxes.  Notably, Toyo’s CVP-23 ink did undergo a finishing process in Japan and Mexico; however, the complaint suggests that this is not sufficient to alter the country of origin and avoid paying the taxes.

This lawsuit was filed under the qui-tam provisions of the False Claims Act in the United States District Court for the Western District of North Carolina by whistleblower John Dickson.  Dickson learned of Toyo Ink’s alleged fraud and filed his case.  When a whistleblower files a lawsuit under these provisions of the False Claims Act, the government can elect to intervene and take over the case, as it has done in this situation.  If the case is successful, the government can recover up to three times its damages plus civil penalties.  Additionally, depending on the circumstances, the whistle blower may be entitled to up to 30% of the government’s recoveries.

Keep an eye out for more updates on this case and to learn how it plays out.  To learn about other types of fraud, check out our website at www.fraudfighters.net.

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