In the first eight months of 2025, the US Department of Justice (DOJ) announced four significant settlements involving allegations of knowingly and improperly evading customs duties on imports under the False Claims Act (FCA). These settlements – and DOJ’s related actions – further underscore the federal government’s ongoing commitment to redirect resources and enforcement strategies toward combating tariff evasion.
The recent settlements signal the heightened risk environment for importers based on the Trump Administration’s enforcement priorities and also reinforce that the FCA remains a powerful and versatile tool in the government’s arsenal for prosecuting customs fraud and tariff evasion. This type of action, sometimes called a “reverse” false claim, occurs when an entity essentially keeps money that it knows belongs to the government.
Importers in the US are required to use reasonable care to declare a range of information about their goods, including the country of origin, value, and classification, to US Customs and Border Protection (CBP), which is used, among other things, to calculate the estimated duties owed. CBP, an agency within the Department of Homeland Security (DHS), is responsible for determining the admissibility of goods into the US and collecting these duties, including antidumping and countervailing duties assessed by the Department of Commerce.
Below, we provide a brief overview of the four recent settlements and discuss the federal government’s continued focus on robust FCA enforcement in the trade and tariff context.
Evolutions Flooring Inc.
As discussed in our previous client alert, in March 2025, a significant settlement was reached with Evolutions Flooring, Inc., a major US importer of multilayered wood flooring, and its owners. The company allegedly evaded customs duties by misrepresenting the country of origin of its products. The case, brought under the FCA by a competitor as a qui tam relator, alleged that Evolutions Flooring submitted false information to CBP to avoid antidumping and countervailing duties assessed by the Department of Commerce on Chinese-origin products. Ultimately, the settlement totaled USD8.1 million, with the relator set to receive over USD1 million in proceeds as part of the recovery.
This case highlights the government’s willingness to pursue reverse false claims cases related to customs fraud.
Global Plastics LLC and Marco Polo International LLC
Global Plastics LLC and Marco Polo International LLC, both subsidiaries of MGI International LLC, are major distributors of plastic resin based in New Hampshire and New York, respectively. On July 23, 2025, both companies agreed to pay USD6.8 million to resolve FCA allegations that they failed to pay the appropriate customs duties on plastic resin imported from China. In doing so, the companies admitted to undervaluing goods and mis-declaring their country of origin between 2019 and 2024.
Notably, in 2024, MGI and its subsidiaries proactively submitted a self-disclosure to DOJ and CBP, acknowledging that since May 2019, Global Plastics and Marco Polo had failed to declare the accurate country of origin and value on certain entries of Chinese-origin plastic resin. Their timely disclosure, comprehensive internal investigation, resulting disciplinary actions, and the implementation of enhanced compliance procedures resulted in credit for their cooperation from the government.
In announcing this settlement, an Assistant Attorney General in the Civil Division reiterated DOJ’s commitment to enforcing fair trade rules, emphasizing that “[w]hen importers fail to pay customs duties owed, they can mitigate the consequences by making timely self-disclosures, cooperating with investigations, and taking appropriate remedial measures.” Acting US Attorney Jay McCormack for the District of New Hampshire further cautioned that “[c]ompanies doing business in the United States must play by the rules, including paying full custom[s] duties owed for imports.”
Grosfillex Inc.
On July 24, 2025, just one day after the Global Plastics and Marco Polo settlement, DOJ announced another settlement, totaling USD4.9 million, related to evading antidumping and countervailing duties. Grosfillex Inc., a Pennsylvania-based patio furniture company, manufactures a wide range of commercial outdoor furniture. The settlement states that Grosfillex knowingly submitted, and caused to be submitted, false customs forms to CBP, claiming that certain furniture parts made of extruded aluminum were not subject to antidumping and countervailing duties. Moreover, Grosfillex allegedly attempted to evade such duties by camouflaging the aluminum parts through repackaging in order to avoid detection. This case originated from a whistleblower lawsuit filed by a former employee of the company, who is now set to receive over USD960,000 as his share of the government’s recovery.
The government’s tone in publicizing the Grosfillex settlement was even stronger as to the measures it is willing to take to combat customs fraud through the FCA. The US Attorney for the Eastern District of Pennsylvania stated that “[t]his settlement should serve as a warning that the United States Attorney’s Office for the Eastern District of Pennsylvania will use every tool available to combat fraud in international trade.” A special agent from Homeland Security Investigations further commented that this settlement highlights the government’s “relentless dedication” to enforcing trade laws and protecting the integrity of the economy.
Allied Stone Inc.
On August 19, 2025, DOJ announced that Allied Stone Inc. and its president agreed to pay USD12.4 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 US on quartz surface products imported from China. The settlement resolves claims that, between September 29, 2018, and February 7, 2023, Allied Stone misrepresented Chinese quartz surface products as other merchandise subject to lesser duties – such as marble or crystallized glass – to avoid the antidumping and countervailing duties. The US government further alleged that Allied Stone failed to declare and pay, and failed to ensure that others declared and paid, the applicable duties on these imports. This case was initiated by a whistleblower under the FCA’s qui tam provisions and is now set to receive approximately USD2.17 million from the government’s recovery.
The government emphasized that the settlement demonstrates DOJ’s commitment to holding accountable those who evade or conspire to evade duties, including antidumping and countervailing duties designed to protect US manufacturers and ensure fair competition. DOJ and CBP reiterated that providing false information to CBP violates the law, and that violators will face significant consequences. Acting US Attorney Nancy E. Larson for the Northern District of Texas said, “This case demonstrates that the United States Attorney’s Office for the Northern District of Texas and its partners will use every tool available to ensure compliance with our nation’s trade policy, including customs, duties, and tariffs on foreign imports meant to level the playing field.”
Parallel civil and criminal enforcement efforts
In addition to pursuing remedies under the FCA, DOJ’s focus on trade and tariff fraud enforcement has also extended to parallel criminal prosecution initiatives. On May 12, 2025, DOJ’s Criminal Division published its white-collar crime enforcement plan, which included the investigation and prosecution of “[t]rade and customs fraud, including tariff evasion” among its highest priorities.
More recently, DOJ established a new Market, Government, and Consumer Fraud Unit, within the Criminal Division’s Fraud Section, that will lead the effort to investigate and prosecute criminal trade fraud and tariff evasion matters, among other responsibilities.
Key takeaways
- Customs fraud and tariff evasion remain a top enforcement priority. DOJ and CBP are intensifying their focus on import violations, as evidenced by recent FCA settlements and strong public statements from enforcement officials. The latest CBP trade statistics further support this, illustrating an increase in enforcement actions and penalties, with the agency on track to surpass previous years’ totals.
- Notable surge in whistleblower complaints. Three out of four of the above settlements involved a whistleblower, including one initiated by a competitor acting as a qui tam relator. This highlights that relator actions are not limited to current or former employees; competitors with knowledge of potential customs fraud are increasingly willing to come forward and pursue FCA claims. The recent Ninth Circuit decision in Island Industries, Inc. v. Sigma Corporation further amplifies this trend by affirming that private parties (including business rivals) can bring FCA claims against importers, even though the Court of International Trade holds exclusive jurisdiction over actions brought directly by the US to recover customs duties. In parallel, the Criminal Division’s recent expansion of its Corporate Whistleblower Awards Pilot Program to explicitly include “violations by or through companies related to trade, tariff, and customs fraud” further incentivizes a broader range of individuals and entities – including business rivals – to report suspected misconduct. As enforcement efforts intensify and awareness of these opportunities grows, importers face a greater likelihood that both insiders and external market participants may initiate FCA actions and report alleged violations of US customs law to enforcement authorities.
- Importance of voluntary self-disclosures. The Global Plastics and Marco Polo settlement demonstrates that voluntary self-disclosures may help mitigate potential liability for customs violations. Companies that proactively identify and report errors or misconduct to the government may benefit from reduced penalties, more favorable settlement terms, and an acknowledgment of good faith compliance efforts. In today’s environment of heightened scrutiny and increased whistleblower activity, voluntary self-disclosure can be a valuable risk management tool in appropriate cases, based on a careful assessment of the merits and the advice of experienced enforcement and customs counsel. Importers should consider implementing or revising existing internal compliance processes to detect potential non-compliance early, which can facilitate timely self-reporting when appropriate.
Conclusion
The recent FCA settlements and enforcement actions make clear that the federal government is intensifying its focus on customs violations and is prepared to use the FCA in this context. Importers are encouraged to take note of this heightened risk environment and evaluate their compliance measures to mitigate potential exposure.
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