Pigment Importer Agrees to Pay More Than $2 Million to Settle False Claims Act Lawsuit

Huber agreed to pay more than $2 million to settle a whistleblower lawsuit alleging it misclassified its imports of pigment to avoid paying a higher tariff rate, according to documents unsealed by the Western North Carolina U.S. District Court. According to the False Claims Act complaint filed by the whistleblower -- John Dickson, chief executive officer of National Ford Chemical -- two companies now owned by Huber, Hostmann-Steinberg and Micro Inks, fraudulently obtained rulings from CBP that directed classification under a tariff subheading for printing ink. The pigment they were actually importing required further processing before being used as printing ink, a fact they did not convey to CBP, the complaint said. Printing ink is subject to a lower tariff rate. The companies also undervalued the merchandise, the settlement said. Huber did not admit to the allegations as part of the settlement. Under the agreement, Huber will pay $2 million to the government and $187,000 to the whistleblower. The court still has yet to accept the settlement and dismiss the case. The government, which chose to intervene in the case, said in a July filing that the issue of how much Dickson will receive in the settlement was still undecided. Dickson received nearly $8 million of a $45 million settlement with another ink company in 2012 resolving a False Claims Act case (see 12121804).