Last month, the U.S. Department of Justice (DOJ) announced the launch of a “cross-agency” Trade Fraud Task Force “to bring robust enforcement against importers and other parties who seek to defraud the United States.” According to DOJ, the Task Force will “augment the existing coordination mechanisms” within DOJ and leverage expertise from DOJ’s Civil and Criminal Divisions and the Department of Homeland Security (DHS) “to aggressively pursue enforcement actions against any parties who seek to evade tariffs and other duties, as well as smugglers who seek to import prohibited goods into the American economy.”
The Task Force announcement occurs against the backdrop of intensified tariff activity, including reciprocal tariffs on nearly every trading partner, and investigations on imports of critical materials from semiconductors to metals and minerals and pharmaceuticals under Section 232 of the Trade Expansion Act. While statutes such as the False Claims Act (FCA) have occasionally predicated trade-related actions in the past, the Task Force represents a concerted effort by the U.S. government to bring greater resources, statutory authorities and prosecutorial power to bear on alleged customs violations. The Task Force is expected to promote coordination between DOJ and U.S. Customs and Border Protection (CBP) to target evasion schemes, including false origin declarations, misclassification, fraudulent under-valuations and other alleged violations that undermine tariff policy and deprive the Government of tariff revenue. As discussed further below, this will likely include not only traditional CBP civil penalty enforcement but also civil and criminal actions under the FCA and statutes such as wire fraud, importing through false statements, and conspiracy.
For importers, this dual pressure—policy expansion coupled with enforcement escalation—creates a complex compliance environment. While the announcement provides important information about how the Task Force will operate, importers and related businesses should stay attuned to the broader trade enforcement context and the open questions that remain in order to assess and mitigate their own risk. At the end of this piece we offer discrete recommendations, including audit and supply chain compliance that incorporates increased risk of DOJ involvement and FCA claims; internal and external reporting mechanisms for potential violations, from both companies and their competitors; and monitoring fast-moving legislative, judicial and regulatory developments that can impact import compliance.
How the Task Force Will Operate
On the personnel front, the Task Force will consist of litigators from the Criminal and Civil Divisions at DOJ. From the Criminal Division, the Task Force will include prosecutors from the Fraud Section’s newly established Market, Government, and Consumer Fraud Unit. Within the Civil Division, the announcement indicates the Task Force will be supported by members of the Commercial Litigation Branch’s Civil Fraud Section (which conducts False Claims Act enforcement) and National Courts Section (which has responsibility for civil customs fraud actions). According to the announcement, attorneys on the Task Force “will work closely with” investigators from U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI), which are both part of DHS.
As for strategy, DOJ’s announcement anchors the Task Force in the “America First Trade Policy” Presidential Memorandum (Jan. 20, 2025) and Executive Order 14243, “Stopping Waste, Fraud, and Abuse by Eliminating Information Silos” (Mar. 20, 2025). According to DOJ, the Task Force will advance these policies by pursuing: (a) customs laws violations through duty and penalty collection actions under the Tariff Act of 1930, as amended (the “Tariff Act”); (b) civil actions under the False Claims Act; and (c) parallel criminal prosecutions, penalties and seizures under Title 18’s trade fraud and conspiracy provisions.
CBP enforces the civil penalty provisions of section 592 the Tariff Act, 19 U.S.C. § 1592. Under the customs law, importers are held to a standard of reasonable care, which requires that importers exercise diligence to make accurate declarations regarding the classification, valuation, country of origin and applicable duty rates for imported merchandise. Section 1592(a) provides that “no person, by fraud, gross negligence, or negligence, may enter, introduce, or attempt to enter any merchandise” into U.S. commerce by means of a material misrepresentation or omission, or aid and abet such a violation. Where CBP has reasonable cause to believe an importer has violated section 1592, it may issue a written penalty notice seeking liquidated damages. Liquidated damages can range from a civil penalty of up to twice the duties owed (for negligence), to the full domestic value of the merchandise (for fraud)—though, after receiving a penalty notice, importers have the opportunity to seek mitigation of monetary penalties under the customs regulations, 19 C.F.R. Part 171.
In addition to seeking civil monetary penalties under the Tariff Act, the Task Force announcement also reaffirms that DOJ will rely on other enforcement tools like the False Claims Act, 31 U.S.C. § 3729. The FCA has been called the government’s “most powerful tool” for combatting fraud against the United States. Although the DOJ has not often used the FCA to bring trade fraud enforcement actions, the Ninth Circuit has recently held that false claims can include not only fraudulent requests for payment but also evasion of obligations to pay customs duties otherwise owed to the government. And, in addition to per-violation civil penalties, the FCA authorizes courts to impose treble damages, which means that knowing violators could end up paying three times the amount of duties owed.
Finally, a trade fraud investigation may implicate a number of criminal offenses in Title 18 of the United States Code, including sections 287 (criminal false claims), 371 (conspiracy to defraud the United States), 541 (false classification of goods), 542 (importing through false statements), 545 (smuggling), 1001 (false statements to government officials), 1341 (mail fraud), 1343 (wire fraud), 1349 (attempt and conspiracy to commit fraud), 1956 (money laundering), and 1957 (transactions in laundered funds). With the exception of sections 287 and 371, all of these offenses could give rise to criminal or civil forfeiture. That means, even absent a criminal conviction, DOJ could file a civil complaint, with a lower burden of proof, that seeks to forfeit the proceeds of trade fraud, a forfeiture money judgment in the same amount, or—in the case of money laundering—any property involved in a transaction with laundered funds.
The Broader Context
Prosecuting trade fraud is not new to DOJ. As the announcement recognizes, the Civil Division has resolved a number of trade prosecutions in 2025. Nor is the idea of a Trade Fraud Task Force new to the Department. As recently as March 2024, DOJ praised the work of a “Trade Fraud Task Force” in supporting a $365 million settlement with Ford Motor Company to resolve allegations that it violated the Tariff Act of 1930 by misclassifying and undervaluing hundreds of thousands of cargo vans imported from Turkey.
Nonetheless, the 2025 version of the Task Force merits serious attention. First, DOJ has formally added the Criminal Division and HSI to the Task Force. The involvement of prosecutors and criminal investigators is likely to increase the number of trade fraud investigations, if not enforcement actions. Second, trade fraud prosecutions are being prioritized in a way they were not previously. That sends a message to agents and prosecutors that trade fraud cases are more likely to get leadership and press attention, which could incentivize working on Task Force matters instead of other investigations. Third, the Task Force announcement expressly encourages relators to alert the government to credible allegations of trade fraud by utilizing the FCA’s qui tam provisions to file sealed complaints on behalf of the United States. While qui tam complaints have long been an avenue for reporting fraud, the DOJ’s express receptiveness to reviewing and potentially acting on trade fraud complaints is new and likely to yield more such reports from an increasingly active relator-side bar.
The addition of the Criminal Division to the Task Force is also significant. Trade penalties in the customs arena, including under the Tariff Act, have historically involved civil monetary penalties. Recent policy changes, however, increase the likelihood that trade fraud allegations and investigations develop into criminal prosecutions.
In May 2025, the Division expanded the scope of offenses that are eligible for its Corporate Whistleblower Awards Pilot Program to include corporate violations relating to trade, tariff and customs fraud. On September 16, 2025, the Criminal Division’s Acting Assistant Attorney General, Matthew R. Galeotti, disclosed that, in the past four months, the Division received 313 whistleblower tips and that 120 of them—including tips relating to trade fraud—warranted further investigation.
Also in May, the Division announced that it had revised its Corporate Enforcement Policy (CEP) to further encourage companies to voluntarily self-disclose misconduct—including misconduct relating to trade fraud. Under the revised CEP, absent aggravating circumstances, a company that voluntarily self-discloses, fully cooperates and remediates, and pays all forfeiture and restitution is entitled to a declination rather than a presumption of a declination. This is significant because the Tariff Act itself provides a mechanism for “prior disclosure,” which allows importers to disclose potential past violations to avoid more exacting monetary penalties. Accordingly, importers considering a prior disclosure to CBP should now also consult with counsel about making a voluntary self-disclosure under the Criminal Division’s CEP.
Unresolved Questions
Notwithstanding the information provided by DOJ about the new Task Force, a number of questions remain. The announcement did not include certain operational details, such as where within DOJ the Task Force will reside, who will lead its day-to-day work, or whether the Task Force will report on its activities beyond press releases describing individual cases. The announcement also did not indicate whether the Task Force will benefit from the allocation of any dedicated resources, whether agents or attorneys. A/AAG Galeotti did, however, recently announce that the Criminal Division would be “leading” DOJ’s effort to investigate and prosecute trade fraud, with a “particular focus” on cases involving (1) “long-running efforts to evade hundreds of millions in tariffs, including tariffs on Chinese products,” and (2) trade fraud schemes involving corporate executives.
Some of the open questions may be answered through pending legislation. For example, legislators in the House’s Select Committee on the Chinese Community Party have reintroduced the bipartisan Protecting American Industry and Labor from International Trade Crimes Act. Among other things, the Act would require the Criminal Division to establish a task force to prosecute trade crimes, and appropriate $20 million for the Division to hire and train prosecutors and investigators and conduct enforcement actions. Depending on the mix of attorneys, investigators and staff, this could result in the addition of as many as 50 to 60 personnel to the Task Force, and the more dedicated resources that are assigned to the Task Force, the more enforcement activity that can be expected. Congress may influence trade fraud prosecutions in other ways. For example, the Chairman of China Select Committee recently sent a letter to Secretary of Commerce Howard Lutnick asking the agency to investigate an importer over the evasion of steep tariffs on Chinese goods—highlighting that Congress has also turned its attention to issues such as misclassification or transshipment of merchandise.
Other questions may be addressed by the Supreme Court. On November 5, the Court will hear the U.S. government’s appeal from the U.S. Court of Appeals for the Federal Circuit’s decision in V.O.S. Selections v. Trump, which held that the President lacked the authority under the International Economic Emergency Powers Act (IEEPA) to impose reciprocal tariffs and the so-called “fentanyl” tariffs. Even if the Supreme Court allows the lower court ruling invalidating these tariffs to stand, many tariffs will remain in place, including tariffs on steel, aluminum, copper and automobiles under Section 232, tariffs under Section 301 of the Trade Act of 1974 imposed on China during President Trump’s first term, and antidumping and countervailing duties under the Tariff Act. In the event of an adverse Supreme Court decision, the Administration will also likely deploy Section 301 and Section 232 with increased vigor to a wider range of countries and products.
In other words, tariffs—and the risk of increased trade fraud enforcement by DOJ—are not going away soon. Indeed, the Criminal Division has already signaled that industry should expect public enforcement actions “later this year.”
What Should Clients Do
The Trade Fraud Task Force announcement signals the U.S. government’s intention to actively pursue duty evasion with a broader civil and criminal toolset. Accordingly, companies should take proactive steps to assess and strengthen their trade compliance posture:
- Audit trade compliance and supply chain programs. Companies should review their import practices, particularly around country-of-origin determinations, classification and valuation, to identify gaps or risks that could lead to enforcement scrutiny. Companies will also need to work with their suppliers to evaluate and obtain information necessary for disclosures under U.S. law.
- Maintain accurate and complete documentation. Clear, well-organized records of import transactions, decision-making on classifications and valuations (including consultations with counsel), and internal controls can help demonstrate reasonable care and significantly reduce the risk of penalties during audits or investigations.
- Strengthen internal reporting mechanisms. DOJ has encouraged whistleblowers and relators to report trade fraud, making it critical for companies to have trusted internal processes that can surface and address concerns before they reach investigators. For example, whistleblowers are not eligible for the Criminal Division’s program unless they first report the conduct internally. This also underscores the importance of incorporating the Tariff Act and CEP disclosure frameworks into the analysis of internal reports to ensure that companies are in the best position to decide whether self-disclosure is appropriate.
- Monitor legislative developments. Proposals like the Protecting American Industry and Labor from International Trade Crimes Act could expand DOJ enforcement capabilities and resources, leading to increased investigative and prosecution activity.
- Track key judicial and regulatory decisions. The Supreme Court’s upcoming decision in V.O.S. Selections v. Trump could affect the validity of certain tariffs, but even a decision limiting one authority may prompt broader use of others, such as Sections 301 and 232. Companies should work with counsel to track court and customs rulings, Federal Register notices, Cargo Messaging Service updates from CBP, and updates to the Harmonized Tariff Schedule relevant to their U.S. imports.
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