DOJ's $6.8B FCA Year: Customs Fraud Became a Priority

The Department of Justice recovered a record $6.8 billion in False Claims Act settlements and judgments in fiscal year 2025. Most of that came from healthcare cases. But a structural shift that happened in 2025 has moved customs fraud from a civil backwater into a top-tier DOJ enforcement priority. A cross-agency Trade Fraud Task Force, a new Criminal Division unit, and an expanded whistleblower awards program now work together to pursue importers who misdeclare origin, misclassify goods, or undervalue entries. This guide explains what changed, what the enforcement patterns look like, and what importers should do to reduce exposure.

What is the DOJ Trade Fraud Task Force?

The Trade Fraud Task Force is a cross-agency enforcement body launched by the DOJ and the Department of Homeland Security on August 29, 2025. According to DOJ, its mandate is to bring robust enforcement against importers and other parties who evade tariffs, duties, and import restrictions.

The Task Force synchronizes personnel from the DOJ Civil Division, DOJ Criminal Division, US Customs and Border Protection, and Homeland Security Investigations. According to law firm Ropes & Gray, it enforces under several statutes: the Tariff Act of 1930, the False Claims Act, and Title 18 trade fraud and conspiracy provisions. This enables parallel civil and criminal proceedings on the same facts.

The Task Force did not come out of nowhere. A May 12, 2025 DOJ memorandum titled "Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime" designated trade and customs fraud as a high-impact enforcement priority. In July 2025, the Criminal Division created the Market, Government, and Consumer Fraud (MGCF) Unit inside the Fraud Section, pulling in prosecutors from the former Market Integrity and Major Frauds Unit and the Consumer Protection Branch. The Task Force in August 2025 operationalized all of that infrastructure.

Why is $6.8B in FCA recoveries a turning point for importers?

Not because most of the money came from customs cases. It did not — about $5.7B of the $6.8B came from healthcare cases, according to the DOJ press release dated January 16, 2026.

The turning point is in the trend lines. FY2023 recoveries totaled $2.68B. FY2024 totaled $3.1B. FY2025 more than doubled to $6.8B, surpassing the prior $6.2B record set in 2014. Whistleblower qui tam filings hit 1,297, breaking the FY2024 record of 980. Before FY2023, the annual average was 600 to 800 qui tam filings. The pipeline is expanding faster than any prior period in FCA history.

Customs fraud is being pulled into that pipeline deliberately. DOJ expanded its Corporate Whistleblower Awards Pilot Program to cover trade, tariff, and customs fraud, in parallel with the Task Force launch. Whistleblowers now have direct financial incentive to report customs violations. The infrastructure is there, and the enforcement dollars are growing.

What does the Ceratizit case reveal about enforcement patterns?

On December 18, 2025, Ceratizit USA agreed to pay $54.4 million to resolve False Claims Act allegations related to evaded customs duties. According to the DOJ press release, it is the largest customs-related FCA settlement in history. The whistleblower received approximately $9.75 million.

The allegations cover three distinct types of customs violations:

• Country of origin misrepresentation. From August 2020 through March 2024, Ceratizit allegedly transshipped Chinese-manufactured tungsten carbide through Taiwan and declared Taiwan as the country of origin to avoid Section 301 tariffs on Chinese goods.

• Misclassification. From June 2015 through March 2024, Ceratizit allegedly used incorrect HTS codes to reduce the applicable duty rate.

• Marking fraud. Some merchandise was allegedly imported without proper country-of-origin marking, and marking duties were not paid before the products were distributed.

Three details stand out for any importer building a compliance program. First, the conduct reaches back to 2015 — roughly nine years of entries in a single settlement. Second, the settlement releases only civil claims; DOJ expressly reserved the right to pursue criminal charges. Third, the case originated with a qui tam complaint filed in 2022 by a relator who described himself as a long-time industry participant. The whistleblower's insider knowledge is what unlocked the case.

How are whistleblowers finding and reporting customs fraud?

Through the qui tam provisions of the False Claims Act, which allow private individuals to file suit on behalf of the government and collect 15% to 30% of any recovery. In FY2025, qui tam recoveries totaled $5.3 billion of the $6.8 billion, or roughly 77% of all FCA recoveries.

For customs cases specifically, the Ninth Circuit's decision in Island Industries Inc. v. Sigma Corporation reaffirmed that qui tam works as an independent enforcement mechanism for customs fraud. Mayer Brown represented the domestic manufacturer plaintiff in that case, which resulted in a judgment of roughly $30 million against an importer that evaded antidumping duties. According to Mayer Brown, the ruling is expected to spur more customs-related FCA activity as tariff regimes continue to evolve.

The DOJ Corporate Whistleblower Awards Pilot Program, expanded in 2025 to include trade and customs fraud, sits alongside qui tam. Together they create two separate paths for insiders to report, with financial incentives on both.

Who typically brings these cases? Based on Ceratizit and similar settlements: industry insiders with knowledge of sourcing and import practices, former employees, and domestic competitors who see their margins eroded by importers evading duties. Any of these parties can trigger an investigation that reaches back years.

What are the three most common types of customs fraud the DOJ is targeting?

Based on recent DOJ enforcement actions and Task Force statements, three patterns appear repeatedly:

Country of origin misrepresentation. Most often, this involves transshipping Chinese-origin goods through a third country (Taiwan, Vietnam, Malaysia, Mexico) and declaring the third country as the origin to evade Section 301 tariffs or antidumping duties. The Ceratizit case and the Wanxiang America case (a separate $53 million settlement on December 18, 2025 involving Chinese auto components and antidumping duty evasion) both involved this pattern.

Misclassification under the Harmonized Tariff Schedule. Using an incorrect HTS code to lower the applicable duty rate. This can happen through ambiguous GRI 1 classifications, incorrect essential character analysis on sets and composite goods, or incorrect derivation in Chapter 99 analysis. The Ceratizit case involved alleged HTSUS misclassification in addition to the origin fraud.

Undervaluation. Declaring a customs value lower than transaction value to reduce ad valorem duty exposure. Common schemes include excluding assists, royalties, or commissions from declared value, or using invoices that do not reflect the actual price paid or payable.

DOJ and CBP use data analytics to flag anomalies across these three patterns. According to law firm Greenberg Traurig, the Task Force explicitly uses a data-driven approach to assess unusual patterns in import practices.

What is the realistic lookback period for customs fraud cases?

Longer than most importers assume. The False Claims Act statute of limitations runs six years from the violation, extendable to ten years in certain cases. The customs statute under 19 U.S.C. § 1592 allows up to five years for negligent or grossly negligent violations, with no fixed limit for fraud.

In practice, DOJ can reach back much further when it identifies a pattern of conduct. The Ceratizit misclassification allegations covered June 2015 through March 2024 — roughly nine years. The country-of-origin allegations covered August 2020 through March 2024 — roughly four years. Both were resolved in a single $54.4 million settlement.

The practical implication: an importer that changed compliance practices in 2022 still has exposure on entries filed from 2018 onward. Records retention, supplier documentation, classification analyses, and valuation files from that period are all within scope if a qui tam is filed.

What should importers do right now to reduce FCA exposure?

Four actions carry the highest leverage.

Audit the three high-risk pattern areas. Pull a sample of entries from the last five years and re-verify country of origin, HTS classification, and declared value. For goods with any Chinese inputs transshipped through a third country, verify that substantial transformation actually occurred. For high-duty classifications or unusually favorable HTS codes, re-check the classification logic. For declared values that seem low relative to industry benchmarks, check what was excluded from the invoice.

Document the decision basis for close classification calls. A documented good-faith analysis at the time of entry is significantly stronger than a reconstructed justification years later. Binding rulings through the CBP eRulings system, written classification memos, and GRI analyses with cited precedents all help establish that an importer did not act knowingly — the scienter element the FCA requires.

Strengthen internal whistleblower channels. Given that 1,297 qui tam suits were filed in FY2025, an employee who discovers a suspected issue has meaningful financial incentive to go to DOJ first. A credible internal reporting channel, clear non-retaliation practices, and prompt investigation of reports reduces the likelihood that an internal issue becomes an external qui tam filing.

Consider voluntary self-disclosure for material issues. DOJ has consistently signaled that cooperation, self-disclosure, and remediation reduce penalties. The MGI International case in December 2025 included a criminal declination based on the company's self-disclosure, cooperation, and remediation — while the former COO still faced criminal charges. Self-disclosure is not risk-free and requires experienced counsel, but it is often a better path than waiting for a qui tam filing that triggers full FCA damages.

Customs fraud enforcement is not returning to the quiet civil backwater it occupied five years ago. The structural commitments DOJ made in 2025 — a dedicated Task Force, a new Criminal Division unit, expanded whistleblower awards — are built to operate for years. Exposure is measured in five-year lookbacks and multi-year investigation pipelines. Compliance decisions made in 2026 will be evaluated, if necessary, in 2030 or later.