DOJ Launches Trade Fraud Task Force with CBP and HSI

Importing has always been a little bit like assembling furniture without the instructions: you think you know what you’re doing, and then one missing
piece (a country-of-origin certificate, a classification memo, a value add-back) suddenly turns your “simple shipment” into a late-night scramble with a customs broker
on speakerphone.

In late 2025, the U.S. Department of Justice (DOJ) made it clear it’s done watching that scramble from the sidelines. DOJ launched a cross-agency Trade Fraud Task Force
in partnership with the Department of Homeland Securityspecifically U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI)to
sharpen enforcement against companies and individuals who allegedly dodge tariffs and duties or smuggle prohibited goods into U.S. commerce.

If you move products across borderswhether you’re a Fortune 500 importer, a mid-market distributor, or a startup that just discovered the Harmonized Tariff Schedule is not a light weekend readthis matters.
The Task Force is designed to tighten coordination, accelerate investigations, and bring more cases that blend civil penalties, False Claims Act (FCA) liability, and (when the facts support it) criminal charges.

What the Trade Fraud Task Force Is (and Why DOJ Built It)

The Trade Fraud Task Force is a DOJ-led, multi-agency effort meant to “bring robust enforcement” against trade and customs fraudespecially schemes that deprive the U.S. government of tariff revenue,
disadvantage compliant businesses, and potentially introduce illegal or prohibited goods into the marketplace.

DOJ’s public framing is straightforward: tariffs and duties are not optional “suggested donations,” and cheating on them isn’t a paperwork oopsieit’s a competitive tactic that can undercut U.S. manufacturers,
distort prices, and weaken trust in the trade system. The Task Force aims to make enforcement faster, more coordinated, and more consequential.

Another big theme: information sharing. Trade fraud often hides in the gaps between agencieswhere one office sees shipping patterns, another sees financial flows, and a third has the on-the-ground investigative capacity.
By combining DOJ’s civil and criminal tools with CBP and HSI expertise, the Task Force is built to reduce those gaps.

The Cast: DOJ, CBP, and HSI (A Serious Story with a Slightly Buddy-Cop Energy)

DOJ: The Legal Muscle (Civil and Criminal)

DOJ brings two powerful lanes to the table:

• Civil enforcement, including duty and penalty collection under customs authorities and major cases under the False Claims Acta statute with teeth, treble damages, and the potential for whistleblower (qui tam) actions.
• Criminal enforcement, including prosecutions for conspiracy, smuggling, and other Title 18 offenses when conduct crosses into deliberate deception and fraud.

CBP: The Front Door (and the Receipt Printer)

CBP sits at the operational center of imports: it collects duties, reviews entry documentation, flags anomalies, and runs enforcement programs that identify evasion schemes.
CBP also has the institutional memory for how tariff evasion actually happens in the real worldbecause CBP sees it first.

HSI: The Investigators Who Follow the Trail

HSI (part of U.S. Immigration and Customs Enforcement) investigates cross-border crimes, including trade-related schemes.
HSI’s Global Trade Division, in particular, is positioned to connect dots across suppliers, freight routes, shell companies, payments, and falsified documentation.
When a trade fraud story has multiple countries and a suspiciously convenient “manufacturer” that doesn’t seem to exist, HSI is built for that puzzle.

So What Exactly Counts as “Trade Fraud”?

“Trade fraud” is a big umbrella. Under it, you’ll find familiar patterns that show up again and againespecially when tariffs rise or when specific countries and product categories face additional duties.

1) Country-of-origin games and transshipment

One of the most common allegations in modern tariff evasion cases is misrepresenting country of origin.
This can involve routing goods through a third country (transshipment) and relabeling paperwork to make it look like the product originated somewhere elseoften to avoid duties like Section 301 tariffs or AD/CVD orders.
A “Made in X” claim is not just marketing; it’s a legal representation at entry.

2) Undervaluation (a.k.a. “Let’s pretend that forklift is on sale”)

Duties are often calculated on the value declared at import. If an importer allegedly understates that valueby using inaccurate invoices, side agreements, or incomplete value add-backsthe government may argue it was shorted on duties owed.
Valuation issues can be especially messy because the details live in contracts, rebates, assists, commissions, and related-party pricing.

3) Misclassification under the Harmonized Tariff Schedule

Classification is not merely an exercise in alphabet soup. Pick the wrong HTS code and you can dramatically change the duty rate.
Some cases allege importers intentionally chose incorrect classifications to reduce duty exposure.
Others start as “disputes” and become “cases” when the government believes the error was knowing, repeated, and financially meaningful.

4) Evading antidumping and countervailing duties

Antidumping and countervailing duties (AD/CVD) exist to counter unfair pricing or foreign subsidies.
When companies allegedly bypass AD/CVD through false declarations or creative paperwork, domestic industries often feel it firstbecause the price pressure hits immediately.

5) Smuggling and prohibited goods

The Task Force isn’t limited to “duty math.” DOJ has emphasized that schemes can also involve smuggling prohibited goods, including products that violate intellectual property rights or are otherwise illegal to import.
The common thread is deception at the border and harm to lawful commerce.

The Enforcement Toolbox: Civil, Criminal, and “Parallel” Actions

One reason the Task Force got attention fast is that it formalizes a posture DOJ already had: use every tool that fits the facts.
Practically, that means companies can face overlapping exposure.

• Tariff Act duty and penalty collection: The government can pursue unpaid duties and civil penalties based on false or incomplete entry information.
• False Claims Act: If import entries are treated as claims for payment (or avoidance of payment), DOJ may use the FCA to pursue alleged duty evasion.
  FCA cases also bring whistleblowers into the equationsometimes insiders, sometimes competitors or industry participants.
• Criminal charges (Title 18): When conduct looks like deliberate fraudfabricated documents, instructions to misrepresent origin, conspiracycriminal investigations and charges become possible.

The phrase to watch is “parallel proceedings.” That’s when civil and criminal enforcement move in coordination.
Parallel tracks raise the stakes: timelines tighten, document holds become urgent, and the “this is probably just a routine customs issue” mindset stops being cute.

Real-World Examples: The Patterns the Task Force Is Built to Catch

DOJ’s announcement didn’t come out of thin air. It pointed to a string of settlements across product categoriesshowing that trade fraud enforcement isn’t confined to one niche.
Here are a few examples that illustrate the alleged playbook.

Multi-layered wood flooring: AD/CVD and Section 301 exposure

In one widely noted case, a company agreed to pay millions to resolve allegations tied to evading duties on imported multi-layered wood flooringan area where AD/CVD and Section 301 tariffs can materially change the economics of imports.
The case highlights how manufacturer identity, documentation accuracy, and supply chain verification can become the central disputenot just the product itself.

Patio furniture parts: “Sham kits” and extruded aluminum

A different case involved allegations that a patio furniture company evaded AD/CVD on extruded aluminum from China.
DOJ described conduct such as allegedly submitting false customs forms and, for some parts, attempting to disguise extrusions by packaging them as “kits.”
The matter underscores how packaging and entry descriptionsthings that look minor in a spreadsheetcan become major in an investigation.

Quartz and stone: classification disputes with big-dollar consequences

Another settlement involved alleged misclassification of quartz surface products to reduce duties owed.
Stone and surfacing products are a classic example of “looks simple, is complicated”: classification can turn on composition, manufacturing process, and technical specs.
When duty differences are large, regulators have a clear incentive to scrutinize repeated patterns.

Tungsten carbide products: transshipment and misclassification allegations

In late 2025, DOJ announced a major settlement involving a distributor of tungsten carbide products.
The allegations included misrepresenting country of origin on Chinese-manufactured products that were allegedly transshipped through another location, along with alleged misclassification and marking duty issues.
The size of the settlementand the whistleblower share discussed publiclysent an unmistakable message: tariff evasion theories are not hypothetical.

Plastic resin: a civil settlement, then a criminal resolution

Perhaps the clearest “Task Force-era” case study is plastic resin.
First came a civil settlement resolving allegations tied to incorrect origin and value declarations.
Then, later in 2025, DOJ announced a criminal resolution in which prosecutors declined to prosecute the company (crediting prior payments and emphasizing voluntary self-disclosure and cooperation),
while a former executive agreed to plead guilty in connection with instructions to misrepresent manufacturer and country of origin documentation submitted to CBP.

That combinationcorporate declination (under a policy framework) plus individual accountabilityis exactly the kind of pattern companies should expect more often when enforcement teams coordinate closely.

What Importers Should Do Now (Before CBP Does It for You)

If you’re waiting for a “knock on the door” moment to modernize import compliance, that’s like waiting for smoke to redesign your kitchen.
Here are practical steps that reduce risk and improve defensibility.

1) Treat country of origin like a legal conclusionnot a label

• Document substantial transformation analysis where relevant.
• Keep supplier affidavits, bills of materials, and production records organized and retrievable.
• Pressure-test “made in” claims when routing changes, subcontractors change, or products are reworked in third countries.

2) Tighten valuation controls

• Identify assists, tooling, royalties, commissions, and related-party pricing that affect customs value.
• Make sure invoices match realityespecially where rebates or side agreements exist.
• Standardize a “value checklist” for each category of imports so teams don’t reinvent the wheel (or forget it).

3) Audit classificationespecially for high-duty categories

• Maintain classification memos and supporting technical specs.
• Revisit classifications when materials, design, or suppliers change.
• Don’t outsource judgment entirely; brokers are partners, but the importer typically owns the risk.

4) Build a “red flag” culture that doesn’t get ignored

Many enforcement actions start with patterns that were visible internally:
repeated amendments, inconsistent invoices, vague product descriptions, suppliers refusing to share production details, or sudden changes in routing that coincidentally reduce duty rates.
Encourage reporting and investigate anomalies earlybefore a third party does it for you.

5) Know what voluntary self-disclosure can (and can’t) do

DOJ has explicitly encouraged importers and their agents to audit importing practices and voluntarily self-disclose and remediate unlawful behavior in line with DOJ guidance.
The details matter, and timing matters. If you discover a potential issue, involve experienced customs counsel early to evaluate exposure and options.

Whistleblowers, Competitors, and “Who Noticed This First?”

Trade fraud enforcement isn’t powered only by government audits. It’s also fueled by people with knowledge:
former employees, compliance professionals, and sometimes competitors who see pricing that doesn’t make sense unless duties aren’t being paid.

DOJ’s messaging makes two channels especially relevant:

• False Claims Act (qui tam): Private individuals can sue on behalf of the government and may receive a portion of recoveries if the case succeeds.
  In the customs context, that can turn trade compliance into a high-stakes whistleblower arena.
• Corporate Whistleblower Program referrals: DOJ has encouraged referrals from domestic industries that believe they’re being harmed by trade fraud.
  The logic is blunt: the companies getting undercut are often the ones who spot the scheme first.

Translation: your compliance program isn’t just about government scrutiny anymore. It’s also about what your own peopleor your market rivalscould allege if they believe the playing field isn’t level.

What This Signals for 2026: More Coordination, More Data, More Pressure

The Trade Fraud Task Force is not a “one press release and done” initiative. The public enforcement record and agency commentary suggest a sustained focus, with emphasis on:

• Tariff evasion tied to China-origin goods, including Section 301 exposure and transshipment allegations.
• AD/CVD evasion, especially where domestic industries raise concerns.
• Large-dollar customs matters where losses are meaningful and patterns repeat over time.
• Individual accountability in cases where executives or managers allegedly directed misrepresentations.

For compliant businesses, the upside is real: stronger enforcement can reduce unfair price pressure from bad actors.
For everyone else, the message is also real: if your compliance posture is “we’ll fix it if someone notices,” the Task Force exists because someone did notice.

Conclusion: The Border Is Becoming a Bigger Enforcement Stage

DOJ’s Trade Fraud Task Forcebuilt with CBP and HSIformalizes a tough, coordinated approach to customs and tariff enforcement.
It blends civil settlements, whistleblower-powered FCA theories, and criminal resolutions when conduct appears deliberate.
The early cases show how trade fraud allegations can arise across product types: flooring, aluminum parts, quartz, tungsten carbide, plastic resin, and beyond.

The best response isn’t panic. It’s professionalism: document origin, validate classification, get valuation right, audit routinely, and treat anomalies as signalsnot annoyances.
In a world where enforcement teams share data and whistleblowers have incentives, “good enough” paperwork stops being good enough.

Experience Corner (Extra): What It Feels Like When Trade Fraud Enforcement Turns Up the Heat

When people imagine a trade enforcement problem, they usually picture something dramatic: a raid, a seizure, a headline.
In reality, the experience often starts with something painfully ordinaryan email, a form number, a deadline, and a sudden realization that “we should’ve organized this better.”

One common storyline begins with a CBP request for information. Maybe it’s a routine check, maybe it’s triggered by data analytics, maybe a competitor raised concerns.
Either way, the request lands and the business has to answer basic questions that somehow became oddly difficult over time:
Who made this product? Where was it made? What’s the bill of materials? Why does the invoice show one value while the internal purchase order shows another?

This is where companies discover the difference between having compliance in theory and having compliance in a folder you can actually find.
Teams start hunting for certificates of origin, supplier affidavits, production records, and classification memos.
Someone inevitably says, “Didn’t we get that from the factory last year?” and someone else replies, “Yes, but it was on a laptop that got replaced.”
It’s not sinister. It’s just operational entropyuntil it’s not.

Then come the uncomfortable internal questions. If the supplier’s story changeddid the product really shift manufacturing locations, or did the paperwork shift because the duty rate did?
If routing changed through a third country, was there a legitimate manufacturing step, or just a logistics stop with a new label?
If the customs broker classified the product, did anyone review the classification logic, or did the team accept it because it was convenient and the duty rate looked nice?

The next “experience” is often emotional: the compliance team feels like the designated adult at a party that’s gotten too loud.
Sales wants shipments moving. Operations wants the warehouse cleared. Finance wants margin protected.
Compliance wants documentation, controls, and timethree things businesses famously love to donate when they’re under pressure.
The Task Force environment makes that tension sharper because the downside isn’t just a corrected entry; it can be a broad review of patterns over years.

In many organizations, the most valuable moment is the one that happens before the government forces it: a real audit.
Not the kind where you check a box and admire your own spreadsheet, but the kind where you pull a sample of entries and try to prove, like you’re in court,
that the declared origin is defensible, the valuation is complete, and the classification is supported.
You see the gaps quickly: missing technical specs, inconsistent vendor names, “temporary” workarounds that became permanent, and templates that were copied forward without verifying whether they still fit the product.

The best trade compliance experiences share a theme: they turn chaos into repeatable habits.
Companies build a standard intake process for new SKUs, require origin documentation at onboarding, run periodic classification reviews for high-risk categories, and create escalation paths when something looks off.
They make it easy for teams to do the right thingbecause if doing the right thing is harder than doing the fast thing, the fast thing wins.

And yes, sometimes the most practical lesson is the simplest: trade compliance is cheaper in daylight.
Fixing an origin process when you control the schedule is one kind of project. Fixing it under deadline, with outside counsel, while pausing shipments and answering investigative questions, is another.
The Task Force doesn’t change the fundamentals of import lawbut it changes the atmosphere.
If your company imports goods, you don’t need to become paranoid. You just need to become prepared.