New York pharmaceutical distributor settles whistleblowers’ fraud allegations

by Ben Vernia | April 13th, 2023

On April 12, the Department of Justice announced that Danco Laboratories, LLC, had agreed to pay $765,000 to settle whistleblowers’ allegations that the company had failed to pay customs duties on drugs it imported. According to DOJ’s press release:

The Justice Department announced today that Danco Laboratories, LLC (Danco), located in New York, has agreed to pay $765,000 to resolve allegations that it violated the False Claims Act by failing to pay certain customs duties, known as marking duties, on imported pharmaceutical products that lacked markings to identify their country of origin.

The Tariff Act of 1930 requires companies that import foreign products into the United States to mark the country of origin on those products. Importers that fail to mark their products are subject to a 10% ad valorem duty. The settlement resolves allegations that, during the period 2011 through 2019, Danco failed to mark imported pharmaceutical products with the appropriate country of origin, and thereafter violated the False Claims Act by knowingly avoiding the marking duties owed to the United States for those imports. 

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The government announced that the whistleblowers, who filed suit through in the name of a company, will receive $115,000 of the settlement (a 15% relators’ share).

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