Importers Beware: Trade Fraud Task Force Surpasses $1 Billion in Enforcement Recoveries

By Brett W. Johnson, T. Troy Galan, and Derrick Kyle

On July 14, 2026, the U.S. Department of Justice (DOJ) announced that the Trade Fraud Task Force (TFTF), a joint initiative with the U.S. Department of Homeland Security (DHS) and the U.S. Customs and Border Protection (CBP), surpassed $1 billion in penalties less than one year after its launch. DOJ described the milestone as reflecting a “fundamental shift” in customs enforcement from administrative penalties toward civil and criminal accountability. As such, stakeholders in the global supply chain (at any tier) should consider this development and the significant governmental resources dedicated to international trade compliance to evaluate ongoing operations, potential updates to policies and procedures, and consideration of voluntary disclosures of past wrongdoing to mitigate past and future risks.

These considerations are particularly significant as companies search for ways to reduce or mitigate growing tariff exposure and uncertainty. Legitimate tariff-mitigation strategies remain available. But strategies based on false country-of-origin declarations, sham manufacturing operations, unsupported classifications, undervaluation, or other inaccurate entry information can result in far more than a CBP penalty. They can lead to False Claims Act (FCA) liability, criminal prosecution, forfeiture, and debarment from federal contracting.

I. Coordinated Enforcement Model

DOJ and DHS established the TFTF in August 2025 to combine CBP’s customs-enforcement authorities, Homeland Security Investigations’ criminal-investigative capabilities, and DOJ’s civil and criminal enforcement tools. Its mandate extends beyond importers to customs brokers, downstream distributors, commercial end-users, and other supply-chain participants that knowingly benefit from merchandise imported contrary to law.

Although the TFTF’s mandate is broad, its principal priorities include:

DOJ reinforced this enforcement structure by establishing a new Global Trade & Commerce Enforcement Section within its National Fraud Enforcement Division. DOJ and DHS also released a comprehensive Resource Guide to Trade Fraud Enforcement, which identifies common trade-fraud schemes and the civil, criminal, and administrative authorities available to pursue them.

II. Where Tariff Mitigation Becomes Trade Fraud

Recent enforcement actions demonstrate that the U.S. Government is increasingly pursuing common tariff-evasion methods through criminal, civil, and administrative enforcement.

Although companies may lawfully reduce tariff exposure through legitimate changes to sourcing, manufacturing, classification, or valuation, those strategies become trade fraud when they depend on false information. Using a foreign supplier, freight forwarder, or customs broker to submit the information does not insulate a company that knowingly causes the false submission or disregards evidence that the information is inaccurate.

Criminal Prosecution for False Country of Origin – DOJ recently charged the operators of a California gold-jewelry import business with falsely declaring that imported jewelry originated in Singapore when it allegedly originated in India and the United Arab Emirates. DOJ alleges that the false declarations resulted in the evasion of more than $38 million in customs duties.

FCA Liability for False Entry Information – In a separate matter, an importer and related companies agreed to pay $549.5 million to resolve allegations that they knowingly made, or caused others to make, false statements on CBP Form 7501 Entry Summaries. The government alleged that the companies misrepresented imported aluminum extrusions as finished pallets that were not subject to antidumping and countervailing duties.

Debarment – During the current fiscal year, CBP debarred 35 parties from doing business with the federal government. Companies that perform government contracts, whether directly or as lower-tier subcontractors or suppliers, should therefore consider customs violations as a potential threat to their eligibility for federal work.

Qui Tam and Whistleblower Actions – DOJ also reiterated its encouragement of whistleblowers to report suspected trade fraud through qui tam actions under the FCA and DOJ’s Corporate Whistleblower Program. This creates an additional avenue through which known or suspected customs violations may come to the government’s attention.

III. Practical Takeaways to Consider

The U.S. Government is no longer content to address trade fraud through administrative penalties alone. Companies involved in the global supply chain should treat customs compliance as an enterprise-level enforcement risk, not simply an import function. The immediate priority should be reviewing tariff-mitigation strategies adopted or expanded in response to increased tariffs, particularly any changes to declared country of origin, HTS classification, or customs value that materially reduced duties.

That review should extend beyond the information appearing on entry documents. Companies should confirm that their customs positions are supported by manufacturing records, invoices, payment records, and the information provided to foreign suppliers, freight forwarders, and customs brokers. Because the TFTF’s mandate reaches the entire supply chain, importers, brokers, distributors, and downstream purchasers may all face exposure. Companies should also assess forced-labor risks, while federal contractors and suppliers should account for the potential consequences of debarment. In doing so, companies should consider other countries’ laws that may conflict or hinder compliance with U.S. international trade laws.

If potential violations are identified, companies should evaluate whether a prior disclosure to CBP or a voluntary self-disclosure to DOJ or another agency that has jurisdiction is warranted. The benefits of early disclosure may be substantially reduced once the government or a whistleblower identifies the conduct.

IV. Conclusion

The TFTF’s billion-dollar milestone confirms that trade fraud is no longer being treated as a routine customs matter. Companies using tariff-mitigation strategies should ensure those strategies are legally supportable before they are tested by CBP, DOJ, or a whistleblower.