The US Department of Justice (DOJ), in coordination with the Department of Homeland Security (DHS), on August 29, 2025, launched a cross-agency Trade Fraud Task Force to bolster enforcement against tariff evasion, customs fraud, and smuggling schemes.
This Task Force integrates prosecutors and trial attorneys from both DOJ’s Criminal and Civil Divisions with DHS elements – US Customs and Border Protection (CBP) and Homeland Security Investigations (HSI) – to pursue both criminal and civil enforcement under the Tariff Act, False Claims Act (FCA), and other criminal fraud statutes. Importantly, the announcement unapologetically “encourages all importers and their agents to conduct thorough audits of their importing practices and voluntarily self-disclose and remediate unlawful behavior.”
The announcement of this initiative builds on several recent DOJ initiatives that focused on greater trade fraud enforcement, beginning with the Criminal Division’s March 12, 2025 release of its white-collar crime enforcement plan, discussed in a prior alert, which included the investigation and prosecution of “[t]rade and customs fraud, including tariff evasion” among the Division’s highest priorities. At the same time, the Criminal Division expanded its Corporate Whistleblower Awards Pilot Program to now reward tipsters who report corporate violations “related to trade, tariff, and customs fraud.” More recently, as covered in our July 2025 alert, this Trade Fraud Task Force initiative appears to build on DOJ’s July 10, 2025 announcement of the Market, Government, and Consumer Fraud Unit (MGCF Unit), a consolidation of personnel from the Criminal Division, Fraud Section’s Market Integrity and Major Frauds Unit (MIMF), and prosecutors from the Civil Division’s Consumer Protection Branch to target trade fraud, tariff evasion, and related misconduct, among other types of fraud. While the official status of the new MGCF Unit remains unknown, DOJ’s message is clear: trade fraud is not a niche customs matter but a top-tier DOJ enforcement priority.
Given the importance of tariffs to numerous US and global companies, the legal authority for President Donald Trump to impose some of the tariffs is continuing to be challenged.[1] However, the Administration has made clear that tariffs are a priority, and it is likely that tariffs will continue to be a cornerstone of US trade policy for the remainder of his term. DOJ has already announced enforcement actions aimed at criminally pursuing importers and other parties who evade duties owed on imported goods, including antidumping and countervailing duties.[2]
Key developments and the enforcement environment
Task force activation
The new Trade Fraud Task Force represents DOJ and DHS’s unified response to tariff evasion schemes, such as undervaluation, misclassification, false country-of-origin declarations, and transshipment, as well as smuggling of prohibited goods. The initiative reflects a broader policy objective of safeguarding US industries, protecting tariff revenue, and deterring unfair competition. The Trump Administration’s “America First Trade Policy” will likely lead to even more such enforcement actions.
DOJ structural realignment
On July 10, 2025, DOJ announced the formation of the MGCF Unit within the Criminal Division’s Fraud Section, consolidating civil and criminal resources to increase the government’s capacity to prosecute long-running, complex trade fraud schemes. Enforcement is expanding well beyond CBP’s civil penalties: DOJ is using criminal statutes such as smuggling (18 U.S.C. § 545), false statements (18 U.S.C. § 542), and IEEPA-based tariff evasion – with penalties that can reach 20 years’ imprisonment – as well as other fraud statutes. This is in addition to the existing framework for civil trade enforcement that has traditionally been handled by the Civil Division’s National Courts Section.
As discussed in a prior alert, the FCA also remains central to civil enforcement, and DOJ also already announced several civil resolutions in the trade and tariff context, pursuing a theory of so-called “reverse” false claims, where a company or individual is accused of submitting a false claim or statement intended to lessen or avoid an amount otherwise owed to the government. Whistleblower-initiated cases are increasingly being filed by competitors as well as employees, creating exposure even for companies that believe their practices were “industry standard.”
Multi-agency coordination, whistleblower incentives, and enforcement trends
The Trade Fraud Task Force fosters intelligence sharing and joint investigations between DOJ’s Civil and Criminal Divisions, CBP, and HSI. DOJ has also signaled it will reward voluntary self-disclosure and proactive remediation through at least three voluntary self-disclosure/corporate enforcement policies from the Criminal Division, National Security Division, and Antitrust Division. Meanwhile, expanded whistleblower programs – through both the FCA and the Criminal Division’s Corporate Whistleblower Awards Pilot Program, launched in August 2024 – mean that tips can originate from multiple sources, increasing the odds of investigation.
As discussed in prior alerts, recent enforcement actions by the DOJ Civil Division wielding the FCA and the DOJ National Security Division settlement of investigations into undervaluation practices and sanctions/export control offenses illustrate DOJ’s aggressive posture and the broad toolkit now being deployed. Enforcement actions to date illustrate that DOJ is leveraging civil FCA penalties, criminal fraud charges, and whistleblower incentives in parallel, and how companies that voluntarily disclose and cooperate may avoid the harshest outcomes.
Focus on non-US companies
Given the “America First” posture of the current Administration, it is likely that enforcement will be focused on non-US companies competing with US companies. Even exporters in countries that have been traditional economic allies, including Canadian, European, Japanese and South Korean, may be subject to greater scrutiny by US regulators and law enforcement as they maneuver to shift and reorganize their supply chains to minimize exposure to the tariffs. DOJ and regulators have consistently and frequently demonstrated a willingness to impose penalties and seek criminal charges against non-US entities and individuals violating US trade laws.
Key takeaways and practical implications for businesses
Given that the Trade Fraud Task Force “encourages all importers and their agents to conduct thorough audits of their importing practices and voluntarily self-disclose and remediate unlawful behavior,” companies must carefully analyze what they can do now to minimize potential legal scrutiny and the related costs and negative publicity. Below, we offer the following considerations for businesses:
- Implement robust, risk-based compliance controls: Businesses should strongly consider re-evaluating and, where warranted, strengthening compliance functions and remediating weaknesses before regulators uncover them or whistleblowers report them, such as:
- Conducting a comprehensive compliance audit or risk assessment, preferably under privilege, to identify exposure in this area, including reviewing import declarations, classifications, valuations, and origins for accuracy, particularly in connection with high-risk jurisdictions or counterparties.
- Updating policies, procedures, and training to proactively detect and prevent violations, including revising compliance manuals and training key staff such as procurement, logistics, finance, and global trade personnel.
- Identifying and investigating red flags to mitigate risk anomalies, or changes such as those in pricing, country of origin, or classification. Red flags should be investigated thoroughly and escalated where warranted for review, remediation, and potential disclosure.
- Maintaining robust internal controls for identifying and reporting internal concerns, such as complaint hotlines (anonymous or otherwise), making clear that whistleblower reports will be protected and retaliation will not be tolerated, and encouraging and emphasizing the importance of reporting concerns to relevant supervisory and/or compliance or legal personnel.
- Monitoring enforcement trends, including tracking DOJ, DHS, and CBP advisories and enforcement actions and reviewing and updating relevant compliance controls accordingly, especially in connection with higher-risk industries such as energy and petrochemicals; steel, aluminum, and metals; electronics and high-tech components; and construction and stone products.
- Elevated risk of enforcement: Companies engaged in importing goods, particularly from high-tariff jurisdictions like China, face unprecedented civil and criminal scrutiny. This risk will likely increase as the Trump Administration’s tariffs on various countries and industries continue to take effect or new ones are implemented.
- Executive accountability: DOJ is explicitly targeting senior executives. Misclassification or undervaluation schemes are no longer seen as “technical errors” but as potential fraud that exposes executives to felony charges. Companies should implement training to ensure that relevant personnel, including gatekeepers, are aware of the new risks and are appropriately attuned to both corporate and individual risk.
- Whistleblower activity and incentives for self-disclosure: FCA qui tam suits are increasingly filed by competitors seeking to level the playing field, as well as insiders with knowledge of improper trade practices. Increased whistleblower activity serves as the “stick” to DOJ’s various voluntary self-disclosure and corporate enforcement policies’ “carrot,” and companies that voluntarily disclose potential violations under DOJ’s framework may see reduced penalties and favorable treatment. In addition, the DOJ’s Criminal Division has increased the incentives to whistleblowers by incorporating tariff and trade fraud in its expanded Corporate Whistleblower Awards Pilot Program.
- Data-driven detection: CBP, DOJ, and other regulatory partners such as the Commerce Department’s Bureau of Industry and Security Office of Export Enforcement are using advanced analytics to flag anomalies and companies should assume their import data is under scrutiny. As part of the audits, referenced above, companies should consider utilizing analytics to determine whether the US government could identify potential improper practices from data provided by the company.
Conclusion
The creation of the DOJ–DHS Trade Fraud Task Force, combined with the series of recent high-profile resolutions, reflects a sea change in US trade enforcement. Tariff and customs fraud is now a criminal enforcement priority at the highest levels of DOJ and the US government.
Businesses engaged in cross-border trade should move quickly to reassess their exposure, update internal controls, and prepare for potential inquiries. Companies that identify risks and consider voluntary disclosure will be better positioned to mitigate liability and preserve reputational capital.
[1] https://www.cafc.uscourts.gov/opinions-orders/25-1812.OPINION.8-29-2025_2566151.pdf (affirming the Court of International Trade’s holding that tariffs imposed by five Executive Orders were not authorized by the International Emergency Economic Powers Act (IEEPA)). The United States Court of Appeals for the Federal Circuit has ordered withholding issuance of the mandate through October 14, 2025.
[2] https://www.justice.gov/opa/pr/allied-stone-inc-and-company-official-agree-pay-124m-settle-false-claims-act-allegations; https://www.justice.gov/usao-sdfl/pr/miami-importer-pleads-guilty-scheme-evade-us-tariffs-chinese-made-truck-tires; https://www.justice.gov/usao-cdca/pr/la-fashion-district-wholesaler-and-two-its-executives-found-guilty-money-laundering.
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