False Claims Act Qui Tam Suit and Government Investigation Settled for International Manufacturer

Faegre Drinker represented a US subsidiary of an international machine tool manufacturer in connection with a Department of Justice (DOJ) investigation pursuant to the False Claims Act (FCA) concerning whether the client paid appropriate duties in connection with the importation of tungsten carbide rods (TCRs). Specifically, DOJ investigated whether (1) the Harmonized Tariff Schedule (HTS) codes utilized by the company in connection with the importation of TCRs were correct, and (2) the country of origin (COI) of the TCRs imported into the United States were correctly listed in relevant import documents.

In addition to assisting with the response to the DOJ investigation, Faegre Drinker conducted a parallel internal investigation. The internal investigation examined (1) the HTS codes utilized in connection with the TCRs imported into the United States and why the HTS codes in question were used, and (2) the COI for the TCRs imported into the United States. The focus of the internal investigation was to determine whether the client paid appropriate duties in connection with its import of TCRs into the United States, and, if the required duties were not paid, the extent of any resulting losses to the United States government.

In December 2025, the client and DOJ entered into a settlement agreement to resolve the FCA investigation. As part of that settlement agreement, the client agreed to pay DOJ $54.4 million. The settlement agreement did not include an admission of liability by the client. The case is now complete.

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