DOJ Launches Trade Fraud Task Force With FCA Power

If your customs paperwork is held together by vibes, a stapler, and the phrase “we’ve always done it this way,” the U.S. Department of Justice (DOJ) just sent you a friendly reminder: the government owns a calculator, too. In late 2025, DOJ formally stood up a cross-agency Trade Fraud Task Forceand it didn’t show up empty-handed. It brought a civil sledgehammer (the False Claims Act, aka the FCA), criminal tools, and partners at the Department of Homeland Security (DHS) who know their way around import records.

The headline version is simple: tariff evasion, duty underpayments, and “creative” country-of-origin stories are now getting a more coordinated, more aggressive enforcement response. The grown-up version is more important: this Task Force makes it easier for the government to run parallel trackscivil, criminal, administrative, and seizuresbased on the same set of facts. Translation: one bad import habit can trigger multiple bad days.

What the Trade Fraud Task Force Is (and why it exists now)

DOJ’s Trade Fraud Task Force is designed to tighten coordination between DOJ’s Civil Division and Criminal Division, while pulling in DHS enforcement muscleespecially U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI). The objective is to pursue parties who allegedly evade tariffs and other duties and to target smugglers trying to bring prohibited goods into the U.S. economy.

It’s also openly aligned with broader policy messaging about protecting domestic industry and ensuring importers pay what they owe. That matters because trade enforcement isn’t just about a missing line item on a spreadsheetit’s framed as revenue protection, fair competition, consumer confidence, and even national security. In other words: the government isn’t treating this like a parking ticket.

The “two-lane highway” approach: civil + criminal

Historically, companies sometimes planned for customs problems like a rainy day: unpleasant, but manageable with an umbrella (and maybe a penalty). The Task Force nudges enforcement toward a two-lane highway:

• Civil lane: duty collection and penalties under customs laws, plus FCA cases seeking big financial recoveries.
• Criminal lane: trade fraud, conspiracy, seizures, and prosecution where DOJ believes conduct was intentional.

The lanes can run at the same time. And when they do, the costs are not just money: disruption, document holds, supplier drama, and the kind of reputational headache that no amount of espresso can fix.

Why the False Claims Act is the Task Force’s “power tool”

The False Claims Act is often associated with government contractors or healthcare billing. But it has a very relevant trade-flavored cousin: the “reverse” false claims theory, which can apply when someone knowingly avoids paying money owed to the government. Customs duties are money owed to the government. You can see where this is going.

What makes the FCA such a big deal in customs cases isn’t just that it’s civil. It’s that it can be expensive: the statute allows the government to seek treble damages plus per-claim penalties. In an import context, “claims” can be tied to entries, statements, invoices, or submissionsmeaning the math can scale fast.

How a customs entry turns into an FCA problem

Trade fraud cases usually revolve around a few key representations made to CBP, such as:

• Classification: the Harmonized Tariff Schedule (HTS) code used to determine duty rates.
• Valuation: what the importer says the goods cost (including issues like related-party pricing).
• Country of origin: where the goods were made and whether a trade remedy applies.
• Applicability of AD/CVD or special tariffs: whether antidumping/countervailing duties or other measures apply.

If DOJ believes those representations were knowingly falseand that the result was underpaid duties or avoided trade remediesit can frame the conduct as a fraud on the government. The Task Force’s whole point is to make those referrals and investigations smoother, faster, and more consistent.

What trade fraud “looks like” in practice

DOJ and its partners aren’t hunting for obscure technicalities nobody could reasonably understand. They’re focused on patterns that tend to show up in intentional evasion schemesespecially when tariffs and trade remedies increase the financial incentive to cheat.

1) Country-of-origin fraud and illegal transshipment

One of the most common patterns is the “passport swap”: routing goods through an intermediate country or mislabeling origin to dodge duties tied to a particular source country. If a product is subject to AD/CVD or special tariffs when made in Country A, suddenly everyone discovers a deep appreciation for “final assembly” in Country B.

2) Misclassification (the HTS code shell game)

Misclassification can be accidentalHTS is complicatedbut it can also be strategic. The fraud version often looks like classifying goods under a code with a lower duty rate (or no AD/CVD exposure), even when product specs, marketing materials, and internal emails paint a different picture.

3) Undervaluation and “double invoicing”

Undervaluation is exactly what it sounds like: declaring a lower value to reduce duties owed. The spicy version is double invoicingone invoice for CBP and another that reflects the real price. If your supply chain involves two versions of reality, DOJ is not going to admire your creativity.

4) Evasion of AD/CVD and other trade remedies

Antidumping and countervailing duties exist to offset dumping and subsidies that harm U.S. industries. When these measures apply, the financial difference can be massiveso enforcement attention is intense. The Task Force explicitly targets evasion of AD/CVD and similar duties intended to “level the playing field.”

5) Smuggling and prohibited goods

The Task Force’s scope also includes smugglers attempting to import prohibited goodsthink goods tied to intellectual property violations, illegal products, or items restricted for other legal reasons. This is where “trade compliance” can quickly become “why are agents in my lobby.”

Specific enforcement examples (the “this is not theoretical” section)

To understand why DOJ calls the FCA a key tool here, it helps to look at the kinds of resolutions DOJ has highlighted in this space. These examples show the recurring themes: origin, valuation, classification, and AD/CVD exposure.

Example: Flooring imports and alleged duty evasion

DOJ announced an $8.1 million resolution involving an importer of multilayered wood flooring and its owners, tied to allegations of evading customs duties on imports from China. The allegations included false information submitted to CBP about manufacturers and country of origin. The case also illustrates a second trend: whistleblowers (qui tam relators) driving customs FCA cases.

Example: Quartz surfaces and alleged evasion of AD/CVD

In another matter, DOJ announced a $12.4 million settlement involving a supplier of countertop and cabinetry products and its president, tied to allegations of evading antidumping and countervailing duties on quartz surface products imported from China. DOJ messaging in the announcement emphasized accountability for companies that “turn a blind eye” to duty evasion.

Example: Extruded aluminum and alleged AD/CVD evasion tactics

DOJ also announced a $4.9 million resolution involving a patio furniture company, tied to allegations that it evaded AD/CVD on extruded aluminum from China. The government alleged false customs forms and described tactics like packaging items as sham “kits” to camouflage aluminum extrusions.

Example: Plastic resin, unpaid duties, and cooperation credit

Not every story is “gotcha.” DOJ announced a $6.8 million FCA resolution involving importers that self-disclosed issues tied to plastic resin imports from China. The announcement underscored that timely self-disclosure, cooperation, and remediation can earn meaningful credit.

When it goes criminal

Civil cases can be costly. Criminal cases can be existential. Public reporting has described indictments and criminal complaints involving alleged schemes to misrepresent origin and valueillustrating DOJ’s willingness to treat certain conduct as deliberate fraud rather than “oops, our broker misunderstood us.”

Whistleblowers: the Task Force’s favorite “free trial” of your internal data

Customs fraud is unusually vulnerable to insider reporting because the paper trail is unavoidable. Somebody touches the invoices, somebody approves the HTS codes, somebody sees the supplier emails, somebody gets asked to “make the description less specific.” That “somebody” might later become a relator.

The FCA’s qui tam mechanism can reward whistleblowers with a share of the government’s recovery, and DOJ has explicitly encouraged whistleblowers to use it for credible allegations of trade fraud. Separate from the FCA, DOJ has also rolled out and expanded whistleblower incentive frameworks in the white-collar space, adding more pressure for companies to take internal reporting seriously.

What importers and companies should do now

You don’t need a panic room. You need a plan. Here’s a practical, business-friendly compliance playbook that maps to the exact risk areas this Task Force targets.

1) Fix the Big Three: origin, classification, and value

• Origin: document substantial transformation analyses, maintain supplier certifications, and validate country-of-origin claims. If your origin story is complicated, write it down like you’ll have to explain it to a skeptical strangerbecause you might.
• Classification: keep product specs aligned with HTS selections. Periodically re-check HTS codes when products change, when rulings evolve, or when new tariffs/trade remedies create incentives for “creative” reclassification.
• Valuation: make sure declared values reflect the rules, including assists, royalties, rebates, and related-party considerations. If there are side payments that never show up on the customs invoice, that’s a flashing red light.

2) Stress-test your broker and your data

Customs brokers are crucialbut “the broker did it” is not a legal force field. Run periodic audits on entry data, reconcile purchase orders to declared values, and confirm that product descriptions actually match what is being imported. A good broker helps you comply. A bad process makes your broker the last person to learn your real risk.

3) Look for classic “tell” signs

• Two invoices for the same shipment (even if someone calls one “internal”).
• Supplier language about “shipping through” another country to “reduce headaches.”
• Sudden HTS code changes right after tariff changes.
• Unusually low declared values compared with market pricing.
• Country-of-origin statements that don’t match factory capacity, inputs, or production timelines.

4) Build an internal reporting path that people actually use

If employees believe reporting concerns internally is pointless (or punished), you’re effectively outsourcing your hotline to a plaintiff’s attorney. Train procurement, logistics, finance, and compliance together. Trade fraud is cross-functionalyour controls should be too.

5) Consider disclosure strategies carefully

In the right circumstances, voluntary disclosure and remediation can reduce penalties and signal good faith. But disclosure decisions are highly fact-specific. Work with experienced trade counsel to evaluate options, including what to disclose, to whom, and whenespecially if there is any risk of parallel civil and criminal exposure.

What this means for 2026 and beyond

The Task Force is not a one-week press-release hobby. Commentary from practitioners and public reporting describe a sustained “pipeline” approach: build referrals, standardize case development, encourage whistleblowers, and run matters through the best enforcement lane (civil, criminal, or both).

Even as the broader tariff landscape shiftswith high-profile litigation over certain tariffs and refund questionsone reality remains stable: if duties are owed and you underpay them through false statements, you are in the enforcement strike zone. The Task Force is built to make sure those cases don’t fall through the cracks.

Bottom line: companies that treat customs compliance like an accounting detail will face bigger risks than companies that treat it like what it is a regulated, documented, enforceable set of obligations with real penalties and real prosecutors behind it.

Conclusion

DOJ’s Trade Fraud Task Force is a clear signal that customs duty enforcement is no longer a niche concern reserved for trade geeks and spreadsheet warriors. With the FCA in play, tariff evasion allegations can become high-dollar civil casesoften fueled by whistleblowerswhile the most serious conduct can land in criminal court. The smartest move isn’t to hope you’re too small to notice. It’s to make your origin, valuation, and classification controls boringly solid. Because “boring” is underratedand it rarely comes with subpoenas.

Experiences From the Field: What Trade Fraud Risk Actually Feels Like

The words “Trade Fraud Task Force” sound like something from an action movieexcept the explosions are mostly email chains and the plot twist is always “someone saved the draft invoice.” Below are composite, real-to-life experiences that compliance teams, import managers, and in-house counsel routinely describe when customs issues start to drift from “minor discrepancy” to “why is everyone suddenly using the word ‘exposure’?”

Experience #1: The invoice that didn’t want to be perceived

A mid-sized importer notices its duty costs seem oddly low compared to competitors. Great for margins… until a finance analyst asks a simple question: “Why does the supplier portal show a different unit price than the commercial invoice we file with CBP?” Cue the awkward silence. In many companies, the first sign of an undervaluation scheme is not a government inquiryit’s internal reconciliation. The scramble that follows is predictable: procurement says the supplier “handles paperwork,” logistics says “that’s what the broker uses,” and finance says “please stop saying the word ‘paperwork’ like it’s a synonym for ‘truth.’”

Experience #2: The origin story changes every time you ask

Country of origin issues often don’t look like fraud at first; they look like confusion. A supplier says goods are “Made in Vietnam.” Packaging says Vietnam. A certificate says Vietnam. Then somebody visits the factory or reviews materials and realizes major components are sourced and assembled elsewhere, with minimal finishing in Vietnam. Suddenly, “Made in Vietnam” starts to sound like “Made in a meeting.” When tariffs and AD/CVD duties are high, companies feel pressure to accept a convenient origin storyespecially if everyone in the chain benefits. The hard-earned lesson: if you can’t explain your origin determination in plain English to a skeptical auditor, you probably can’t defend it to the government.

Experience #3: The HTS code “update” that quietly saved a fortune

Classification problems often begin with an innocent change: a new product variant, a new material, or a new packaging format. But the risk spikes when a classification change happens right after a tariff change. Imagine an internal note that says, “We should consider a different HTS code to reduce duty.” That sentence is not automatically illegalbut in a future investigation, it may become Exhibit A in the government’s “knowledge” argument. In practice, the safest companies treat classification like engineering: document the rationale, preserve product specs, and get binding guidance when needed. The risky companies treat classification like a coupon code: try a few until something works.

Experience #4: The whistleblower you didn’t realize you hired

Customs fraud, if it exists, usually requires internal participationsomeone has to provide descriptions, approve values, route invoices, or push through shipments under tight deadlines. That means someone also has the evidence. When employees feel ignored, underpaid, or blamed for management decisions, they may go looking for leverage. A compliance team can do everything right and still get a tipbut companies that do nothing to encourage internal reporting practically roll out a red carpet for external complaints. The “aha” moment for many organizations comes when they realize a whistleblower case is not just about money; it’s about narrative. If the company can show it trained people, documented decisions, and corrected mistakes, its story is “we made a good-faith effort in a complex system.” If it can’t, its story becomes “we benefited from the confusion.”

These experiences all point to the same takeaway: the DOJ’s Trade Fraud Task Force doesn’t create trade fraud risk out of thin air. It amplifies consequences for patterns that already existespecially when tariffs and trade remedies make the temptation to cut corners stronger. If you want to sleep better, don’t aim for perfect. Aim for provable: decisions you can explain, records you can produce, and controls that work even when deadlines scream and margins whisper sweet nothings.

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