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Settlement Reached in Lawsuit Following Whistleblower’s Report on Mifepristone Distributor

The Department of Justice recently made an announcement regarding the resolution of a lawsuit involving allegations of False Claims Act violations against Danco Laboratories, LLC. According to the government, Danco failed to appropriately mark imported pharmaceutical products with their country of origin and deliberately avoided paying the required marking duties to the United States. Danco is a distributor of Mifeprex (mifepristone).

Danco, headquartered in New York City, has agreed to pay $765,000 to the U.S. Government in order to settle the case. The Tariff Act of 1930 mandates that companies importing foreign products must indicate their origin through proper marking.

Principal Deputy Assistant Attorney General Brian M. Boynton stressed the Department of Justice’s dedication to ensuring that importers fulfill their obligations under customs laws. The allegations against Danco were initially brought to light by an entity that happened to be a law firm. The organization filed a qui tam lawsuit under the False Claims Act, which enables private citizens to sue on behalf of the government when there is knowledge of fraud against the government. As part of the settlement agreement, the relator will receive $115,000 as a whistleblower award. It is important to note that the whistleblowers did not raise any concerns regarding defects, safety issues, ineffectiveness, or violations of FDA regulations related to Danco’s pharmaceutical products.

The U.S. Attorney Brit Featherston expressed the commitment of his office to ensuring transparency and compliance with customs laws and the False Claims Act by importers. He stated his determination to vigorously pursue those who attempt to evade their legal duties and obligations.

Former FBI Special Agent Jason T. Brown who leads the whistleblower law firm Brown, LLC stated, “An often-overlooked False Claims Act cause of action is Customs Fraud.  Defrauding customs by obfuscated product origin, or not paying on items that are dutiable, such as royalties, can be addressed through the False Claims Act and whistleblower stand to receive an award for any information that leads to a successful recovery.”