The Trade Fraud Task Force: Customs Fraud Enforcement Across the Supply Chain

The DOJ Trade Fraud Task Force targets customs fraud across the supply chain, including the broker, distributor or buyer who knowingly helps goods escape the duties owed. The person who supplied the false description can matter as much as the business named on the entry. The Department of Justice and the Department of Homeland Security launched the task force on August 29, 2025, with duty and penalty collection actions and False Claims Act cases among its tools. The competitor that paid the full duty has to compete with goods that escaped it, and taxpayers are left short of money they are owed.

Trade Fraud Task Force Charged Losses Versus Money Recovered

The Justice Department’s July 14, 2026 announcement reported more than $1 billion in recoveries and charged losses in less than a year, including alleged losses. False Claims Act customs fraud cases feature among those enforcement results: the government is pursuing duties businesses kept from it.

Who Investigates Customs Fraud?

U.S. Customs and Border Protection investigates customs fraud. The Justice Department’s Civil Division and U.S. Attorneys’ Offices bring the civil cases. By July 2026, the Justice Department’s announcement named 35 participating U.S. Attorneys’ Offices.

Its priorities include false origin, transshipment, mislabeling and false declarations, evasion of Section 301 tariffs and antidumping and countervailing duties, forced labor, and imported goods that threaten public health and safety. The mandate reaches the product itself as well as the duty bill.

Customs Fraud Enforcement Reaches Brokers and Buyers

The mandate reaches beyond the importer of record to customs brokers, downstream distributors and industrial or commercial end users who knowingly profit from illegally imported goods. Knowingly is the important word. Someone working inside a broker, distributor or buyer may know which description was supplied, who received a warning and who approved the next transaction.

The policy also reaches the business behind the importer number. The June 2026 customs enforcement order directed tighter importer vetting, ownership disclosures, asset and bond requirements, and increased audits and penalties for brokers. Its instructions to the agencies also called for limits on penalty reductions and an end to reductions for repeat offenders.

What Evidence Is Needed to Prove Fraud?

The useful evidence connects the goods, the declaration, the unpaid duty and what the participants knew. Product specifications, supplier invoices, payment records and instructions to the broker can tell different parts of the same shipment’s story.

The importer declares the value, classification and duty rate. Customs fixes the final value, classification and amount owed afterward. A broker files on the importer’s behalf, but the importer remains responsible for the duty, including when it has paid the broker and the broker has not paid Customs. That division of work matters when the person who knows the product and the person entering the data sit in different businesses.

The manifest, bill of lading, commercial invoice and entry summary are separate documents produced by different participants. Before ocean cargo arrives, the Importer Security Filing already identifies the seller, buyer, manufacturer or supplier, origin and tariff classification, along with where the container was packed. Public vessel-manifest data can disclose the shipper, importer or consignee, cargo and origin. An industry competitor can see part of the chain from outside. The person inside may know why the product description changed before the broker filed the entry.

What Trade Data Can Show

Trade-data comparisons can help identify where an investigation should look. Mirror Analysis and Revenue Fraud, published by the World Customs Organization in 2015, draws on work in Cameroon and Ecuador comparing a country’s imports with its trading partners’ exports. Gaps in quantities, weight or value help identify patterns for investigation.

The paper makes a useful distinction when estimating the revenue at stake:

The duty attached to the product matters. The paper recommends testing the statistical picture against investigators’ experience in the field. An insider who knows the actual goods, the supplier and the instructions behind the entry brings that missing business account.

Perfectus Aluminum’s Pallets Had No Customers

Perfectus Aluminum shows what a finished-product claim can conceal. The Justice Department’s May 2026 civil settlement announcement described allegations that more than 2.2 million Chinese aluminum extrusions were spot-welded together to look like functional pallets and declared as finished merchandise outside antidumping and countervailing duties. There were no customers for the supposed pallets, and none were sold.

The civil allegations concerned false Customs Form 7501 Entry Summaries. The Justice Department later reported $549.5 million collected through the settlement. The whistleblowers’ 18% share applies to settlement proceeds returned to Customs. The business had called the goods finished products. Its missing customers told a different story.

For antidumping duty fraud, the merchandise described in the order matters, beyond the tariff number on an entry. Importers deposit estimated duties, and the final assessment after review can be higher.

The Same Finished-Product Claim in Furniture

Grosfillex agreed to a $4.9 million settlement over allegations that it presented Chinese aluminum furniture components as finished furniture kits and left earlier declarations uncorrected after learning they were false. The whistleblower’s complaint alleged that imported bases and backs would generally be paired with different components in the United States. It quoted an engineering manager discussing what Customs should see:

In the complaint’s account, the goods were separate parts, and the instruction was to hide that from Customs.

False Origin, False Descriptions, and the Buyer

Ceratizit USA‘s $54.4 million settlement in December 2025 concerned tungsten carbide, a hard, wear-resistant material used in cutting tools and other components. The Justice Department alleged that Chinese products traveled through Taiwan and were declared Taiwanese to avoid Section 301 tariffs. It also alleged incorrect tariff classification and missing country-of-origin markings with unpaid marking duties. The whistleblower was awarded approximately $9.75 million from the settlement proceeds.

Allied Stone‘s $12.4 million settlement in August 2025 addressed allegations that Chinese quartz was described as marble or crystallized glass. The allegations also reached its failure to ensure that manufacturers and third parties serving as the official importers declared and paid the applicable duties. This is the buyer’s place in the Task Force’s supply-chain mandate: the commercial decision can sit beyond the name on the entry.

Global Plastics and Marco Polo International, subsidiaries of MGI International, reached a civil settlement following voluntary self-disclosure over plastic resin imports. The settlement agreement alleged declarations of Taiwan, Saudi Arabia or the United States in place of China, incorrect values and missing origin markings. The government credited the companies’ disclosure, investigation, cooperation and corrective action.

Who Can File a Qui Tam Lawsuit?

Employees, competitors and trade associations can bring whistleblower cases under the False Claims Act. The Aluminum Extruders Council was among the parties behind the Perfectus suits. Domestic businesses harmed by trade fraud can report competitor customs fraud through a whistleblower case.

Different people see different pieces. Accounts payable knows what the supplier received. Sourcing knows the factory. A broker may hold the filing instructions. A competitor knows the goods it is losing orders to. Connecting those pieces is how the commercial story becomes evidence of unpaid duty and knowing decisions.

How Do I Report Customs Fraud?

Our whistleblower experts assess how to report customs fraud with you, connecting the goods, the false declaration and the unpaid duty to what the participants knew. False Claims Act customs fraud cases can pursue duties a business knowingly kept from the government. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Sources

• Justice Department: the Trade Fraud Task Force launch announcement, August 29, 2025
• Justice Department: the Trade Fraud Task Force recoveries and charged losses announcement, July 14, 2026
• Federal Register: Strengthening Customs Enforcement, June 10, 2026
• Justice Department: the Perfectus Aluminum settlement announcement, May 12, 2026
• Justice Department: the Ceratizit USA settlement announcement, December 18, 2025
• Justice Department: the Allied Stone settlement announcement, August 19, 2025
• World Customs Organization: Mirror Analysis and Revenue Fraud, 2015

Bring the Business Behind the Entry Into View

If you know who changed the description, origin or value before a shipment reached Customs, speak with our whistleblower experts about the people and transactions behind it. We build the case with you across the businesses involved and bring in customs fraud whistleblower lawyers who understand the product and the duties at stake. You have our expertise and advocacy through the whole case.