Toyo Ink SC Holdings Co. Ltd, Toyocolor Co. Ltd., Toyo Ink Co. Ltd. and Toyochem Co. Ltd. based in Japan and U.S. affiliates Toyo Ink Mfg. America LLC, Toyo Ink International Corp. and Toyo Ink America LLC (collectively “Toyo Ink”) have agreed to settle charges that they violated the False Claims Act. Toyo Ink has agreed to pay $45 million, plus interest to settle allegations that they knowingly failed to pay import duties owed to the U.S. Department of Commerce.
According to Toyo Ink’s website, it is a leading provider of commercial printing inks, color and media materials, and graphic arts supplies. It further states that Toyo Ink has approximately 7,000 employees in the U.S., Asia and Europe.
According to the Justice Department, the U.S. Department of Commerce assesses import duties on goods imported into the United States to protect U.S. businesses by offsetting unfair foreign pricing and government subsidies. Import duties vary depending on the last country in which the product underwent a substantial transformation (“Country of Origin”). The duties are collected by the U.S. Customs and Border Protection.
The government alleged that, from 2002 to 2010, Toyo Ink intentionally misrepresented to U.S. Customs the Countries of Origin for the colorant carbazole violet pigment number 23 (“CVP-23”). The Justice Department alleges that Toyo Ink represented the Countries of Origin as Japan and Mexico when in fact, the Countries of Origin were China and India. The government alleges that Toyo Ink misrepresented the Countries of Origin because imports from Japan and Mexico are not subject to the duties, but imports from India and China are.
The allegations first came to light in a whistleblower lawsuit filed by John Dickson, president of a domestic producer of CVP-23, under the qui tam provisions of the False Claims Act. In accordance with the qui tam provisions, Dickson will receive $7,875,000 of the settlement amount as his reward.