The Department of Justice and Department of Homeland Security are aggressively pursuing companies that evade tariffs, smuggle prohibited goods, and undermine American manufacturers through their Trade Fraud Task Force. For those working in import, export, customs, and manufacturing who have witnessed fraudulent trade practices, this enforcement initiative represents a significant opportunity to come forward, report misconduct, and potentially receive substantial financial rewards for doing so.
The Cost of Trade Fraud
Trade fraud costs the United States billions in lost revenue while giving dishonest importers unfair advantages over law-abiding American businesses. Companies evade antidumping duties, countervailing duties, and Section 301 tariffs through misclassification schemes, country-of-origin fraud, undervaluation, and other deceptive practices. The Task Force combines resources from DOJ's Civil and Criminal Divisions with Homeland Security Investigations and U.S. Customs and Border Protection to identify and prosecute these schemes.
Critically, the government recognizes that industry insiders are best positioned to detect fraud. As Deputy Assistant Attorney General Brenna Jenny emphasized, the Task Force "welcomes the vital contributions of whistleblowers who can help identify fraud schemes involving an array of imported products."
Significant Trade Fraud Recoveries
The government has secured substantial settlements in trade fraud cases, demonstrating serious commitment to this enforcement area:
- $12.4 million from Allied Stone Inc. for evading duties on quartz surface products
- $8.1 million from Evolutions Flooring Inc. for evading duties on multi-layered wood flooring
- $6.8 million from importers who evaded duties on plastic resin
- $4.9 million from Grosfillex Inc. for evading duties on extruded aluminum products
These cases demonstrate the government's willingness to pursue trade fraud aggressively across diverse industries and product categories.
Two Powerful Whistleblower Programs
The Task Force actively encourages whistleblowers through two complementary programs:
False Claims Act Qui Tam Actions: Whistleblowers can file lawsuits on behalf of the government for false statements made to evade customs duties. Successful whistleblowers receive 15-30% of recovered funds, which can amount to millions of dollars given the size of typical trade fraud schemes.
DOJ Corporate Whistleblower Program: The Criminal Division's program accepts referrals for criminal trade fraud investigations involving tariff evasion, smuggling, and conspiracy.
Common Trade Fraud Schemes
Whistleblowers have exposed numerous types of trade fraud, including:
- Misclassifying products to avoid higher tariff rates
- Falsifying country-of-origin documentation to evade country-specific duties
- Undervaluing imported goods to reduce duty payments
- Transshipping products through third countries to disguise true origin
- Creating shell companies to obscure the actual importer
- Smuggling goods that violate intellectual property rights
Who Should Come Forward
If you work in importing, customs brokerage, freight forwarding, warehousing, manufacturing, or related industries and have knowledge of tariff evasion or trade fraud, you may have a valuable whistleblower claim. Domestic manufacturers competing against importers engaged in fraud are particularly well-positioned to identify schemes that harm American businesses and workers.
Protected and Rewarded
Federal law protects whistleblowers from retaliation. If you report trade fraud and face termination, demotion, or harassment, you have legal remedies including reinstatement, double back pay, and special damages.
The government needs industry insiders to identify and expose trade fraud. Our firm has extensive experience representing whistleblowers in False Claims Act cases and working with federal enforcement agencies. We handle cases on a contingency basis and can guide you through both whistleblower programs. Contact us for a confidential consultation to discuss how we can help you expose trade fraud while protecting your rights and maximizing your recovery.
