The American trade landscape has transformed rapidly as the United States’ “America First” national-security platform reshapes international relations. New executive orders, proclamations, and memoranda issued under the International Emergency Economic Powers Act (“IEEPA”), Section 232 of the Trade Expansion Act, and Section 301 of the Trade Act now aim to govern virtually every cross-border transaction touching the United States. As consequential as the trade controls themselves, however, is the administration’s move to cast customs compliance as a national-security imperative and to deploy the full arsenal of federal criminal and civil statutes, most prominently the False Claims Act (“FCA”), to police evasion of tariffs and customs duties. Federal officials have called tariff fraud “the new sanctions” and vowed to pursue importers with the same intensity previously reserved for terrorist financing and anti-corruption cases. The result is an enforcement environment in which a misclassified screw or an undervalued shipment can trigger treble-damage exposure, wire-fraud counts, and even smuggling indictments. This article attempts to dissect the Justice Department’s prosecution playbook, surveys early case law, and offers practical guidance for companies attempting to navigate aggressive trade-fraud enforcement.

I. From Tariffs to Trade Crimes: Reframing Customs Law as National Security

Unlike traditional tariff policy—often driven by industrial lobbying or revenue-raising goals—the new trade policies are explicitly framed as responses to national emergencies. The administration claims that intellectual-property theft, supply-chain vulnerabilities, and trade-balance deficits are threats to American power. 

Executive Order 14257 illustrates the shift. Issued on April 2, 2025, it declared an emergency under IEEPA, imposed a universal ten-percent duty, and raised the prospect that higher reciprocal tariffs would be levied on nations that maintain tariffs and non-tariff trade barriers that disadvantage U.S. goods. Separate proclamations quickly added a 125 percent surcharge on Chinese imports, restored twenty-five-percent duties on steel and aluminum, imposed new levies on automobiles and auto parts, and ordered U.S. Commerce Department investigations into imports of copper, lumber, pharmaceuticals, semiconductors, critical minerals, trucks, and aircrafts and aircraft parts. 

Then-Deputy Assistant Attorney General Michael Granston, speaking to qui tam practitioners in February 2025, announced that “illegal foreign trade practices” sit atop the Civil Division’s docket for at least the next four years. Attorney General Pam Bondi echoed the point, describing the FCA as “the tip of the spear” against companies that manipulate country-of-origin data, valuations, or Harmonized Tariff Schedule (“HTS”) codes. The head of the U.S. Department of Justice’s (“DOJ’s”) Criminal Division followed those statements with a directive for the Criminal Division to “prioritize investigating and prosecuting white-collar crimes in the following high-impact areas…[t]rade and customs fraud, including tariff evasion.” Meanwhile, U.S. Customs and Border Protection (“CBP”) has been instructed to refer every suspected violation for prosecutorial review without offering importers a pre-penalty grace period. In short, the procedural guardrails that once insulated inadvertent mistakes from criminal exposure have been removed, at least when it comes to investigating potential noncompliance. The administration has made clear that it intends to impose deterrence through publicity: large settlements, public interventions in whistleblower suits, and headline-grabbing smuggling pleas signal that tariff evasion will be punished with unprecedented vigor.

II. The False Claims Act as a Trade Enforcement Deterrent

The FCA is DOJ’s principal civil tool for combatting customs fraud and tariff evasion. Traditionally associated with healthcare and government procurement fraud, the FCA can also be deployed against importers who knowingly underpay duties, misstate country of origin, or misclassify goods to avoid tariffs. The statute’s knowledge standard is notably broad: liability attaches not only to actual knowledge, but also to “deliberate ignorance” or “reckless disregard” of the truth. Companies can face treble damages and per-claim penalties even where intent is inferred from circumstantial evidence, such as ignoring red flags or failing to investigate supplier representations.

A distinctive feature of the FCA is its qui tam provision, which allows private whistleblowers (relators)—including competitors, employees, and supply-chain insiders—to file lawsuits on the government’s behalf. Relators are incentivized by the prospect of recovering up to thirty percent of any recovery, which could fuel a surge in customs-related FCA filings. Recent years have seen settlements and judgments across a range of industries, from flooring and apparel to electronics and healthcare, with companies paying millions to resolve allegations of undervaluation, transshipment, or false country-of-origin declarations. The government’s willingness to intervene early in these cases, and to publicize settlements, underscores the FCA’s centrality to the new enforcement landscape.

The FCA’s reach is further amplified by its "reverse false claims" provision, which imposes liability for knowingly avoiding an obligation to pay money to the government—such as customs duties. As a result, importers must exercise "reasonable care" in all customs filings, maintain robust compliance systems, and promptly investigate any internal reports of noncompliance. Failure to do so can expose both the company and responsible individuals to treble damages, statutory penalties, and, in egregious cases, parallel criminal prosecution.

III. Prosecutorial Arsenal: Civil and Criminal Statutes in Play

There are myriad overlapping trade statutes available to enforce trade controls, yet the DOJ rarely confines itself to customs-specific remedies. Several statutes could be brought to bear in the new trade-fraud toolkit:

1. False Claims Act (31 U.S.C. § 3729) and Criminal False Claims (18 U.S.C. § 287). Civil liability can arise under the FCA for violations where a party, acting with actual knowledge, deliberate ignorance, or reckless disregard, seeks to avoid paying a tariff or duty owed to the United States (e.g., employees instructed to “re-invoice” goods through a lower-tariff jurisdiction). Civil liability can reach treble the government’s lost revenue plus per-violation statutory penalties.
2. Wire Fraud (18 U.S.C. §§ 1343, 1349). Any interstate or foreign communication used to execute a tariff-evasion scheme could support wire-fraud counts.
3. False Statements (18 U.S.C. § 1001). Material misrepresentations or omissions on entry summaries, certificates of origin, or post-summary corrections expose both companies and individuals to possible criminal penalties—even where no duty loss ultimately occurs.
4. IEEPA (50 U.S.C. § 1705). Because many duties arise under emergency declarations under IEEPA, willful violation of implementing regulations (to the extent that the president’s authority to levy tariffs under IEEPA ultimately is upheld by the courts) triggers possible criminal penalties and civil fines.
5. Smuggling (18 U.S.C. § 545). Concealing origin, undervaluing, or otherwise importing “contrary to law” can result in imprisonment and forfeiture of merchandise.
6. Conspiracy (18 U.S.C. § 371 and 18 U.S.C. § 286). Any agreement—explicit or tacit—between two or more persons to impede tariff collection is itself a separate felony, often charged to capture third-party logistics providers, brokers, or foreign suppliers.

In criminal cases, the charging decision typically turns on the egregiousness of the conduct and the strategic value of the case. In 2025, DOJ has pursued both civil FCA complaints and criminal information against executives simultaneously, thereby maximizing financial recovery and deterrent messaging.

IV. Early Enforcement Actions: From Apparel to Truck Tires

The administration wasted no time following through on it promises to pursue customs and tariff fraud. In April 2025, DOJ publicly intervened in a qui tam FCA suit against Barco Uniforms. The whistleblower alleged that Barco used sham invoices to undervalue apparel sourced from Asia. In announcing intervention, DOJ highlighted an internal auditor’s warning that duty calculations were suspect—emphasizing the FCA’s deliberate-ignorance prong. Equally significant is DOJ’s press release announcing its decision to intervene; it serves as a clear signal to competitors, disgruntled employees, and others that DOJ will embrace whistleblowers.

Other cases underscore creative charging theories. For example, a Miami businessman was indicted for routing Chinese truck tires through Canada and Malaysia to avoid the China-specific surcharge. Prosecutors layered wire-fraud counts atop smuggling allegations, alleging that falsified certificates moved electronically between freight forwarders and importers. That hybrid approach allows the government to capture restitution, seek longer guidelines ranges, and sidestep potential defenses premised on technical customs-law ambiguities.

V. The Central Role of Whistleblowers and the Private Bar

Although CBP referrals dominate criminal investigations, the engine of civil FCA enforcement is the qui tam relator. Competitors, former employees, and freight-forwarding insiders have filed a growing number of sealed complaints alleging undervaluation, misclassification, or country-of-origin fraud.

Relator dynamics create unique compliance risks. Because the FCA allows a relator to receive a bounty payment of up to thirty percent of the government’s take, insiders have a powerful incentive to bypass internal hotlines and file directly in federal court. Companies therefore must design reporting systems that encourage early escalation and protect whistle-blowers from retaliation, both to reduce the chance of litigation and to establish the “absence of deliberate ignorance” if a claim later arises.

VI. High-Risk Sectors: Where the Spotlight Shines Brightest

While no industry is immune, certain sectors sit squarely in DOJ’s crosshairs:

Manufacturing and Heavy Industry. Heightened steel, aluminum, and auto tariffs magnify the financial upside of misclassification or undervaluation. Procurement teams must align purchase-order data with CBP entry documents to prevent transfer-pricing inconsistencies that could be misconstrued as fraud.

Healthcare and Life Sciences. With pharma-specific tariffs on the horizon and active pharmaceutical ingredients still heavily China-dependent, hospitals, distributors, and device makers face layered risk: customs duties, Trade Agreements Act compliance, and Buy American rules for federal purchasers such as Veterans Affairs and Department of Defense. Past FCA recoveries against London Bridge Trading Company (textiles) and Coloplast (medical devices) show that origin misstatements can yield eight-figure settlements even absent tariff surcharges.

Technology and Electronics. Pending semiconductor tariffs and de minimis changes pose risk for e-commerce platforms reliant on low-value imports. The removal of duty-free treatment for Chinese packages under $800 imposes new declaration burdens on fulfillment centers and last-mile carriers.

Critical Minerals. Copper, timber, and specialty minerals investigations—coupled with existing sanctions on Russian metals—force refiners and traders to document origin at each node. Careless reliance on supplier certificates risks both tariff and sanctions exposure.

VII. Compliance Expectations in the New Era

Navigating the increased enforcement efforts necessitates comprehensive strategies beyond policy documentation. Companies should consider implementing an integrated trade-compliance framework built on six pillars.

1. Supply-Chain Mapping and Origin Analysis. Document manufacturing steps sufficient to satisfy the “substantial transformation” test. Maintain engineering records, bills of materials, and product-specific rulings to rebut CBP queries.
2. Valuation Governance. Align customs values with transfer-pricing arrangements, capture assists, royalties, and rebates. Automate customs value fields to pull from enterprise resource-planning systems rather than manual entry.
3. HTS Classification Reviews. Establish cross-functional review committees—legal, logistics, and engineering—when tariff code changes could materially affect duty rates.
4. Third-Party Due Diligence. Require brokers and freight forwarders to certify classification, valuation, and origin. Embed audit rights and indemnities in master service agreements.
5. Internal Reporting and Whistle-Blower Engagement. Provide protected channels, train supervisors to escalate concerns, and investigate quickly. A credible compliance culture is the best defense to FCA scienter allegations.
6. Proactive Disclosures and Remediation. Where errors are discovered, weigh prior-disclosure filings with CBP and voluntary self-disclosure to DOJ. Early, well-documented remediation can mitigate treble-damage exposure and avert criminal referral.

VIII. Strategic Considerations for In-House Counsel

General counsel confronted with potential non-compliance with tariffs face a number of difficult decisions. 

1. Determine whether misstatements were negligent or deliberate. The FCA’s “reckless disregard” standard leaves little room for inaccuracies once red flags surface.
2. Assess whistle-blower risk: has an employee raised concerns? If so, document every response to establish good-faith investigation.
3. Model financial exposure under CBP penalty guidelines, IEEPA (as applicable), FCA multipliers, and potential debarment from federal contracting (particularly under the Buy American Act).
4. Prepare for parallel proceedings: administrative penalties often evolve into civil FCA suits, which in turn can spawn criminal probes based on the same conduct.

Counsel should also factor in reputational dynamics. The administration’s strategy relies on publicizing settlements as deterrence. A company able to demonstrate wholehearted cooperation, restitution, and robust remediation stands a better chance of resolving matters quietly and on civil terms. Conversely, stonewalling or marginalizing whistle-blowers may convert what might have been a negligence-level penalty into a parallel criminal-FCA indictment.

IX. Outlook: Enforcement Trajectory Through 2028

Several structural forces suggest that trade-fraud enforcement will accelerate rather than plateau. First, tariff complexity is expanding, not contracting, because each new product-specific duty creates classification ambiguities that can be exploited or misconstrued. Second, the whistle-blower bar is increasingly sophisticated in mining public customs data, reconciling shipment manifests with HTS codes, and identifying anomalies that support FCA complaints. Third, DOJ’s line prosecutors now enjoy greater autonomy—with political leadership focused on immigration and public-safety matters, white-collar units face fewer bottlenecks in charging decisions. Finally, CBP’s mandate to refer every suspected violation ensures a pipeline of criminal leads.

Companies should therefore treat customs compliance as a board-level risk akin to sanctions or anti-bribery law. The cost of robust compliance—automated classification tools, origin audits, and targeted training—pales in comparison to the downside of FCA treble damages, exclusion from government contracts, and criminal indictment. In this new era, trade enforcement is not a niche regulatory concern, it is a core element of national-security policy with concrete consequences.

Conclusion

New laws and policy decisions have upended conventional trade compliance. By tying duties to national-security declarations and leveraging the legal arsenal of the FCA, wire-fraud statutes, and smuggling provisions, the administration has elevated routine customs filings to the realm of significant monetary liability and potential federal crimes. Early cases against a wide range of industries reveal a playbook built on whistleblower suits, public interventions, and hybrid civil-criminal resolutions. High-risk sectors—manufacturing, healthcare, technology, and energy—should be vigilant and consider implementing or improving origin tracing, valuation controls, and proactive whistle-blower engagement. The message from DOJ is unmistakable: every customs entry is now a potential national-security data point, and any effort to shortchange the Treasury will be met with enforcement. For companies engaged in global commerce, the imperative is clear: embed trade compliance at the heart of enterprise risk management or face the prospect of treble damages, public humiliation, and, in the most egregious cases, criminal conviction.