Trade Fraud Task Force Surpasses US$1 Billion In Recoveries And Penalties – With No Signs Of Slowing

The U.S. Department of Justice (DOJ or Department) Trade Fraud Task Force has surpassed US$1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses since its August 2025 launch, signaling intensified customs fraud enforcement and tariff evasion investigations.

The DOJ and U.S. Customs and Border Protection (CBP) are aggressively pursuing False Claims Act (FCA) litigation and criminal prosecutions against importers, customs brokers, and other supply chain actors for tariff evasion, antidumping and countervailing duty fraud, forced labor violations, and false country-of-origin declarations.

Enforcement is reaching beyond importers to the entire supply chain while increasingly targeting tariff evasion, antidumping and countervailing duty circumvention, forced labor risks, and other trade-related misconduct.

On July 14, 2026, the DOJ announced that its Trade Fraud Task Force (Task Force), launched in August 2025 in partnership with the U.S. Department of Homeland Security (DHS), had surpassed US$1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses. The announcement highlights the degree to which trade and customs fraud enforcement has been on the rise, as well as the resources the DOJ and other federal agencies are devoting to investigating and prosecuting tariff evasion. Companies engaged in cross-border trade would be wise to take the announcement as impetus to examine existing tariff compliance systems to avoid costly investigations and enforcement actions.

The Trade Fraud Task Force: Mission and history

Combatting trade and customs fraud is a core component of the second Trump Administration’s enforcement agenda. In May 2025, only four months into the new administration, the DOJ’s Criminal Division designated trade and customs fraud as “high-impact” enforcement priorities for the Department. The July 2026 announcement confirms that, in the year since, both the DOJ and CBP have indeed expended significant resources to detect and deter tariff evasion.

As we previously highlighted, on August 29, 2025, the DOJ announced the creation of the multi-agency Task Force, intended to “bring robust enforcement against importers and other parties who seek to defraud the United States.” At its launch, the Task Force aimed to increase collaboration and data sharing among the DOJ and DHS components to target parties circumventing or evading tariffs imposed under various trade statutes. The Task Force has since expanded its list of partners to include nearly three dozen U.S. Attorneys’ Offices, as well as law enforcement personnel from various U.S. government agencies, including CBP, Homeland Security Investigations (HSI), the Internal Revenue Service (IRS) Criminal Investigation, Environmental Protection Agency (EPA) Criminal Investigation Division, the Fish and Wildlife Service, the Consumer Product Safety Commission (CPSC), and the Food and Drug Administration (FDA).

Working alongside these partners, the Task Force investigates and prosecutes companies that have allegedly defrauded the federal government through material misrepresentations in importing activity. As the DOJ stated in its July 14 press release, the Task Force’s mandate spans the supply chain – importers, customs brokers, downstream distributors, industrial and commercial end-users, and other supply chain actors – all of whom are fair targets if they knowingly profit from merchandise imported in contravention of U.S. tariff law.

Importantly, though, the Task Force’s focus is not limited to traditional customs enforcement issues. In addition to its focus on companies accused of evading Presidential tariffs and antidumping and countervailing duties (AD/CVD), the Task Force has expanded its trade enforcement priorities to include the eradication of forced labor from global supply chains that seek to exploit U.S. markets, the financing of foreign adversaries, and prosecuting criminal violations of imported goods that threaten public health and safety.

To this end, the administration is increasingly using the FCA to pursue trade fraud. The DOJ has also explicitly encouraged corporate whistleblowers – anyone from disgruntled employees to domestic competitors – to report potential customs fraud via the Department’s Corporate Whistleblower Program. The initial press release touting the creation of the Task Force even includes a link to report potential violations, encouraging “whistleblowers to utilize the qui tam provisions of the [FCA]” to file claims on behalf of the government.

The Task Force’s first billion: Notable settlements and resolutions

Since the Task Force was announced in August 2025, it has secured a number of high-dollar resolutions across a range of industries:

• On December 18, 2025, the Task Force announced its first resolution of a criminal trade fraud investigation into MGI International, LLC – a global plastic resin distributor – and its subsidiaries. Pursuant to Part I of the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy, the DOJ declined to prosecute MGI and agreed to credit the US$6.8 million that the company previously paid to resolve its FCA liability for failing to pay duties on plastic resin imported from China to the criminal resolution. The criminal investigation was conducted in partnership with HSI.
• On December 18, 2025, Ceratizit USA LLC, a Charlotte, North Carolina-based distributor of tungsten carbide products, agreed to pay US$54.4 million to resolve allegations that it violated the FCA by knowingly failing to pay duties owed on products imported from the People’s Republic of China.
• On April 27, 2026, another HSI-led criminal investigation into Boise Cascade Company resulted in a guilty plea where the company admitted to its role in a timber trafficking scheme to evade AD/CVD duties on plywood imported from China. Boise Cascade was sentenced to pay a fine of US$6.3 million, which was twice the gross profits it derived from the illegal wood at issue in the case.
• On April 28, 2026, Royal Sovereign International, Inc. was sentenced to pay an US$8 million criminal fine and restitution for violating the Consumer Product Safety Act by failing to report dangerous defects in its air conditioners. The air conditioners, which were manufactured in and imported from China, were allegedly linked to more than 40 fires and one death.
• And on May 12, 2026, California-based Perfectus Aluminum Inc. agreed to pay US$549.5 million to resolve allegations that the company violated the FCA by knowingly evading, or conspiring to evade, AD/CVD duties on aluminum extrusions imported from China. The investigation was conducted in partnership with HSI and CBP, and the settlement makes up over half of the US$1 billion in recoveries announced in DOJ’s July 14 press release.

The July 14 press release also announced two new criminal cases brought by the DOJ against Surya International, Inc., and Barkha Wholesale, Inc., in partnership with the U.S. Attorney’s Office for the Northern District of Illinois, which the Task Force has designated as its lead prosecutorial partner. Both cases involve alleged customs duty evasion schemes in which the companies falsely declared countries of origin for gold jewelry, enabling them to avoid duties of between 5.5 and 5.8 percent in declared value. Approximately US$38 million in customs duties is at stake in the case against Surya International, Inc. That figure is approximately US$13.6 million in the case against Barkha Wholesale, Inc. Both cases – along with their potential to secure high-dollar resolutions – make clear that the DOJ is not resting on its laurels; it is continuing to put effort and resources behind trade enforcement.

Trade Fraud Task Force as part of the Trump administration’s broader focus on trade and customs enforcement

The Task Force is not an isolated initiative by the Trump Administration. Rather, it is built on, and has been followed by a series of actions prioritizing trade enforcement and signaling the Administration’s focus on tariff evasion and related misconduct.

In addition to touting the Task Force’s recovery figures, the DOJ’s July 14 press release announced the creation of the Global Trade & Commerce Enforcement Section (GTCES) within the National Fraud Enforcement Division (NFED). GTCES will work alongside the Task Force to investigate and prosecute criminal trade fraud offenses that threaten consumer health and safety, finance foreign adversaries, promote forced labor through illegal trade practices, and “undermine American industries,” such as through AD/CVD evasion. The creation of a new section at DOJ signals that enhanced investigation and prosecution of trade fraud will live on as one of the Department’s long-term enforcement priorities.

In collaboration with DHS, the DOJ also published the first of its kind Resource Guide to Trade Fraud Enforcement (“Guide”), aimed at providing companies with a “historic and seminal roadmap for cross-border compliance and enforcement priorities.” The Guide further underscores DOJ’s focus on trade fraud, describing it as a “crucial priority” for protecting the nation’s economic security, domestic industries, and collection of lawful revenue. Importantly for companies engaged in cross-border trade, the Guide identifies 16 common trade fraud typologies that the DOJ sees as high-risk enforcement areas, including false country-of-origin declarations and markings, undervaluation, and false Harmonized Tariff Schedule classification.

What this means for companies engaged in cross-border transactions

Companies should take action to ensure that their trade compliance programs meet this moment of heightened scrutiny. Particularly as the government continues to pursue trade fraud enforcement under the FCA – which requires only a showing of willful blindness or reckless disregard of facts that would have put the company on notice that it was underpaying and which triggers treble damages and civil penalties – companies should proactively conduct supply chain audits and ensure that their trade compliance policies and procedures are aligned with the latest guidelines put forth by the administration.

Companies should also take extra precautions to avoid misidentifying country of origin, particularly with respect to imports originating in China, or misclassifying or undervaluing imports, since even innocent missteps can trigger a DOJ investigation.

Finally, if a violation is discovered, companies should work with counsel to determine whether voluntary self-disclosure under the DOJ’s Corporate Enforcement Policy is appropriate. Implementing an effective internal reporting program to preserve the option of disclosure is key to an effective compliance strategy.