Three Enforcement Actions, One Message: Trade Violations Are Serious Crimes

Learn more about this topic in our upcoming webinar: From Error to Action: Filing a Prior Disclosure with CBP 

As tariffs climb and global trade becomes more complex, a growing number of importers are testing the limits, or outright breaking the law, to reduce or avoid duty payments and other compliance costs. U.S. enforcement agencies, including Customs and Border Protection (CBP) and the Department of Justice (DOJ), have made it clear that customs fraud will not be tolerated and is a top enforcement priority. Three recent cases illustrate the new reality for enforcement. 

1. Undervaluation and the False Claims Act: $2.1 Million Settlement

An importer of fitness equipment agreed to pay $2.1 million to resolve allegations under the False Claims Act that it knowingly undervalued imported goods. 

According to the government, the company knowingly declared artificially low values on its imports in order to reduce tariff obligations. The company also failed to include the cost of computer tablets incorporated into packaged equipment.  

The settlement also resolves a qui tam False Claims Act case brought by a whistleblower, Mr. Greg Dahlstrom. Dahlstrom will receive $420,000 of the proceeds from the settlement. 

2. Importing Precursor Chemicals: Possible Life Sentence

On April 27, 2026, the United States Attorney for the Southern District of New York announced the unsealing of an indictment charging two Chinese nationals with importing a methamphetamine precursor chemical into the United States with the intent to manufacture narcotics, along with conspiracy to distribute methamphetamine.  

The defendants face a maximum sentence of 20 years in prison for importation of a methamphetamine precursor chemical and a maximum sentence of life in prison for the conspiracy to distribute methamphetamine charge.  

While the underlying conduct and more serious charges involve controlled substances, the case highlights that the importation of prohibited goods is a key enforcement point. 

3. Timber Trafficking and Duty Evasion: $6.3 Million Penalty

In another enforcement action, Boise Cascade Company pleaded guilty to a felony violation of the Lacey Act for its role in a timber trafficking scheme to evade countervailing and anti-dumping duties and was sentenced to pay a fine of over $6.3 million. Boise purchased, received, sold, and transported hardwood plywood from Horizon Plywood knowing (including actions manifesting willful blindness) that hardwood plywood was illegally imported from China. The importation was illegal because Horizon smuggled the wood and violated the Lacey Act by falsifying import declarations for hardwood and softwood plywood. Boise knew that Horizon had previously tried to hide the origin of the wood that it imported and knew or should have known the plywood purchased from Horizon was sourced from China.

The Bigger Picture and What Importers Should Do 

While these cases involve very different facts, they all demonstrate that the government means what it says in prioritizing enforcement. Further, penalties are not limited to unpaid duties, and prosecutors are not afraid to seek big settlement amounts or prison time.  

Now more than ever, it is critical for importers to examine their import compliance programs and ensure that adequate procedures are in place to correctly enter goods into the United States.  

Importers should proactively conduct extensive due diligence in their supply chains to ensure they can detect, report, and remedy any noncompliance with customs requirements. In addition, if an importer becomes aware of the fraudulent conduct of a competitor, they should contact counsel to discuss options for reporting it to the government. 

Diaz Trade Law can assist importers in developing compliance plans and guide importers in the event of a customs investigation. Contact us at 305-456-3830 or info@diaztradelaw.com. 

Learn more: 

• High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk 
• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement 
• Bloomberg Law: What is an Importer’s Reasonable Care Standard? 
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ 
• Bloomberg Law:  Submitting a Prior Disclosure to CBP 
• Webinar: The False Claims Act 
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices 
• Webinar: Basics on Tariff Classification 
• Webinar: Building and Maintaining an Effective Import Compliance Plan