On August 29, 2025, the U.S. Department of Justice (DOJ) announced the formation of a cross-agency Trade Fraud Task Force in partnership with the Department of Homeland Security (DHS) to "bring robust enforcement against importers and other parties who seek to defraud the United States."^[1]  The Task Force will coordinate efforts across DOJ's Civil and Criminal Divisions and DHS's agencies, including U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI), to ensure compliance with customs laws.

This move is consistent with the Trump Administration's focused use of tariffs as an economic and foreign policy tool and is in line with the America First Trade Policy^[2] and Executive Order 14243.^[3] The Task Force will employ a number of criminal and civil enforcement tools, including the False Claims Act to achieve its goal.

As discussed in our prior blog post, the Trump Administration announced back in February 2025 that it intended to aggressively enforce the False Claims Act (FCA), 31 U.S.C. § 3729(a) et seq., particularly in cases involving tariff circumvention and customs fraud. In this context, the FCA is enforced through "reverse false claims," which arise when an individual knowingly and improperly avoids or reduces a payment obligation to the government, such as tariffs or duties. The FCA also gives private parties a cause of action to initiate claims on behalf of the government through so-called "qui tam" actions and allows for treble damages—creating a strong incentive for whistleblowers and private parties to report violations through qui tam claims.

As we predicted in April, there has been an increase in trade- and tariff- related FCA enforcement cases by the DOJ. In the first eight months of the new Administration, the DOJ announced four significant settlements in cases brought under the FCA for tariff evasion:

• On August 19, 2025 Allied Stone Inc., a Texas-based supplier of countertop and cabinetry products, and its president, agreed to pay $12.4 million to resolve allegations that they violated the FCA by knowingly and improperly evading, or conspiring to evade, antidumping and countervailing duties owed to the United States on quartz surface products imported from China by misrepresenting the products as other goods.^[4]
• On July 24, 2025, Grosfillex Inc., a Pennsylvania-based patio furniture company, agreed to pay $4.9 million to resolve allegations that it violated the FCA by evading antidumping and countervailing duties owed to the United States. The settlement resolved allegations that Grosfillex intentionally submitted false customs forms to CBP claiming that certain furniture parts made of extruded aluminum originating from China were not subject to antidumping and countervailing duties.^[5]
• On July 23, 2025, Global Plastics LLC, and Marco Polo International LLC, major distributors of plastic resin based in New Hampshire and New York, agreed to pay $6.8 million to resolve allegations that they failed to pay appropriate customs duties by undervaluing goods and mis-declaring the country of origin for their products.^[6] In this case, Global Plastics and Marco Polo voluntarily self-disclosed their alleged misconduct and received credit for their cooperation.
• On March 25, 2025, Evolutions Flooring Inc., a California-based imported of wood flooring and its owners, agreed to pay $8.1 million to resolve allegations that they violated the FCA by knowingly and improperly evading customs duties on imports of multilayered wood flooring from China by misrepresenting the identity of manufacturers and country of origin of their imported goods.^[7]

In addition to the risk of high FCA civil penalties, with the announcement of this Task Force, it appears that the Administration will also use the FCA to criminally prosecute tariff circumvention and customs fraud. The DOJ can criminally prosecute willful reverse FCA violations under 18 U.S.C. § 287 and violators can be punished by up to five years imprisonment.

The creation of the Task Force and DOJ's willingness to pursue criminal prosecution of reverse FCA violations are in line with the Administration's priority to enforce against tariff evasion and customs fraud. We expect to see an even bigger surge in both criminal and civil pursuit of FCA violations. Additionally, given the large financial incentives, we expect a surge in whistleblower qui tam complaints under the FCA.

Takeaways

Clients can prepare by evaluating their import controls programs and quickly and effectively addressing concerns or potential gaps and violations. Key areas of risk include accurate classification of imported goods, country of origin, and valuation, as well as under-resourcing trade compliance, failure to audit trade departments and vendors, and, for financial institutions, processing transactions that facilitate tariff evasion. Additionally, with the DOJ's latest guidance increasing the potential benefits of voluntary self-disclosure, clients should promptly consult with counsel to determine the best strategy to remediate any issues that are identified.

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[1] Press Release No. 25-893, DOJ, "Departments of Justice and Homeland Security Partnering on Cross-Agency Trade Fraud Task Force" (Aug. 29, 2025), (https://www.justice.gov/opa/pr/departments-justice-and-homeland-security-partnering-cross-agency-trade-fraud-task-force)

[2] The White House, "America First Trade Policy" (Jan. 20, 2025), (https://www.whitehouse.gov/presidential-actions/2025/01/america-first-trade-policy/?utm_medium=email&utm_source=govdelivery)

[3] Executive Order No. 14243, "Stopping Waste, Fraud and Abuse by Eliminating Information Silos) (Mar. 20, 2025) (https://www.whitehouse.gov/presidential-actions/2025/03/stopping-waste-fraud-and-abuse-by-eliminating-information-silos/?utm_medium=email&utm_source=govdelivery)

[4] Press Release No. 25-863, DOJ, "Allied Stone Inc. and Company Official Agree to Pay $12.4M to Settle False Claims Act Allegations Relating to Evaded Customs Duties" (Aug. 19, 2025) (https://www.justice.gov/opa/pr/allied-stone-inc-and-company-official-agree-pay-124m-settle-false-claims-act-allegations)

[5] Press Release No. 25-779, DOJ, "Patio Furniture Company Grosfillex Inc. to Pay $4.9 Million to Resolve Allegations it Evaded Duties on Extruded Aluminum from the PRC" (July 24, 2025) (https://www.justice.gov/opa/pr/patio-furniture-company-grosfillex-inc-pay-49-million-resolve-allegations-it-evaded-duties)

[6] Press Release No. 25-739, DOJ, "Importers Agree to Pay $6.8M to Resolve False Claims Act Liability Relating to Voluntary Self-Disclosure of Unpaid Customs Duties" (July 3, 2025) (https://www.justice.gov/opa/pr/importers-agree-pay-68m-resolve-false-claims-act-liability-relating-voluntary-self)

[7] Press Release No. 25-301, DOJ, "Evolutions Flooring Inc. and Its Owners to Pay $8.1 Million to Settle False Claims Act Allegations Relating to Evaded Customs Duties" (Mar. 25, 2025) (https://www.justice.gov/opa/pr/evolutions-flooring-inc-and-its-owners-pay-81-million-settle-false-claims-act-allegations)