Double Invoicing: Why Two Invoices Mean Federal Fraud

You send one invoice to your buyer with the real transaction value. You send another to U.S. Customs and Border Protection with a lower number. The difference reduces your duty payment. This is double invoicing — and in 2025, the Department of Justice made it a top enforcement priority under the False Claims Act.

This article explains how double invoicing works, what penalties it triggers, and why most cases now start with a whistleblower inside your own company.

What Is Double Invoicing in Customs?

Double invoicing is the practice of creating two separate commercial invoices for the same shipment. One invoice reflects the actual transaction value and is used to collect payment from the buyer. The second invoice shows a lower value and is submitted to CBP for calculating customs duties.

The gap between the two values is the unpaid duty. Under U.S. customs law, the importer of record is responsible for declaring the accurate transaction value on entry documents. Submitting a false invoice to reduce duty payments is not a gray area — it is fraud on the federal government.

This scheme is sometimes called dual invoicing or undervaluation fraud. It often involves coordination between the U.S. importer and a foreign manufacturer who produces both versions of the invoice. In some cases, the manufacturer generates the false invoice without the importer explicitly requesting it — but the importer's obligation to verify accuracy does not disappear.

Why Does DOJ Use the False Claims Act for Customs Fraud?

The False Claims Act (31 U.S.C. § 3729) imposes civil liability on anyone who knowingly submits false claims to the federal government. Because customs entry documents are government filings, a false invoice submitted to CBP qualifies as a false claim.

FCA penalties are severe. Violators face treble damages — three times the government's actual loss — plus per-claim civil penalties ranging from $11,463 to $22,927 per false entry. For an importer filing hundreds of entries per year, the exposure adds up fast.

The FCA also includes a "reverse false claims" theory. This applies when a party knowingly avoids an obligation to pay money to the government — which is exactly what happens when an importer underpays customs duties by submitting a lower invoice value.

In May 2025, DOJ's Criminal Division identified trade and customs fraud as its number-two corporate criminal enforcement priority, according to a memo titled "Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime." In fiscal year 2025, total FCA recoveries across all sectors exceeded $6.8 billion — the highest annual total in the statute's history, according to analysis by Troutman Pepper.

What Happened in the Global Office Furniture Case?

In July 2025, the DOJ filed an FCA complaint against Global Office Furniture LLC (GOF), a Myrtle Beach company that imported office chairs manufactured in China and sold them under the Amazon brand. According to the DOJ's press release, GOF and its owner engaged in a double-invoicing scheme between 2019 and 2023, submitting false entry summaries to CBP that undervalued imported merchandise.

The scheme worked like this: GOF created one invoice with the actual price for billing Amazon, and a second invoice with a significantly lower price for CBP duty calculations. The DOJ alleges GOF evaded at least $2 million in tariffs.

The case originated from a qui tam whistleblower complaint filed under seal by GOF's former office manager in March 2020. The DOJ investigated for five years before formally intervening in April 2025. The government also alleges that GOF's owner attempted to delete emails and documents after learning of the federal investigation.

How Many Companies Has DOJ Targeted?

GOF was not an isolated action. In the summer of 2025 alone, the DOJ announced four significant FCA cases involving customs fraud:

• Global Office Furniture — $2M+ in evaded tariffs, double invoicing on Chinese office chairs (DOJ, July 2025)

• Global Plastics / Marco Polo International — $6.8 million settlement for failing to pay duties on plastic resin from China, including misrepresenting country of origin (DOJ, July 2025)

• Grosfillex Inc. — $4.9 million settlement for evading antidumping/countervailing duties on extruded aluminum from China by disguising parts as furniture "kits" (DOJ, July 2025)

• Allied Stone Inc. — $12.4 million settlement for evading AD/CVD duties on quartz surface products from China (DOJ, August 2025)

Combined, these four actions represent over $26 million in settlements and claims from a single summer. In August 2025, the DOJ and Department of Homeland Security formalized this enforcement push by creating the Trade Fraud Task Force, combining resources from DOJ, CBP, and Homeland Security Investigations.

Why Do Whistleblowers Start Most Cases?

The False Claims Act includes a qui tam provision that allows private citizens to file lawsuits on behalf of the government. If the case succeeds, the whistleblower receives 15 to 30 percent of the government's total recovery.

This creates a direct financial incentive for employees, contractors, or business partners who witness customs fraud to report it. In the GOF case, the whistleblower was the company's own office manager. In many FCA customs cases, the complaints come from former employees, competing importers, or supply chain partners who see the discrepancies firsthand.

CBP can only physically inspect a small percentage of imported goods. Whistleblower tips fill the enforcement gap that inspections cannot cover. The DOJ has explicitly acknowledged that qui tam actions are a primary driver of customs fraud enforcement.

The financial math makes reporting attractive. On a $12.4 million recovery like the Allied Stone case, a whistleblower's share at 15–30% would range from $1.86 million to $3.72 million. In similar past cases, whistleblower awards have exceeded $2 million.

What Should Importers Do to Avoid Exposure?

The DOJ's enforcement pattern points to several concrete steps:

• One invoice, one value. The transaction value declared to CBP must match the actual price paid to the supplier. Any discrepancy between the buyer-facing invoice and the customs invoice is a red flag.

• Audit your supplier's invoices. In several cases, the foreign manufacturer produced the false invoice. But under CBP regulations, the U.S. importer of record bears the "reasonable care" obligation to ensure filings are accurate.

• Preserve all records. The GOF case included allegations of document destruction after the investigation started. Deleting evidence escalates civil exposure into potential criminal liability.

• Consider voluntary self-disclosure. The Global Plastics case resulted in a $6.8 million settlement after the company proactively disclosed its violations to DOJ and CBP in 2024. DOJ has stated that timely self-disclosures and cooperation can mitigate consequences.

• Train your team. Employees who handle invoicing and customs filings need to understand that creating or forwarding a false invoice carries personal and corporate liability. Awareness is the first layer of compliance.

Is Double Invoicing the Same as Transfer Pricing?

No. Transfer pricing refers to the prices charged between related entities within the same corporate group, primarily for income tax purposes. Double invoicing is the deliberate creation of a false document — a second invoice with a fabricated lower value — submitted to customs authorities to reduce duty payments.

Transfer pricing disputes are handled by the IRS and involve complex rules about arm's-length valuations. Double invoicing is straightforward fraud: you created a document you knew was false and submitted it to a government agency. The legal exposure is fundamentally different.

Key Takeaways

• Double invoicing is federal fraud under the False Claims Act, not a gray area.

• FCA penalties include 3x damages plus $11,463–$22,927 per false entry.

• In summer 2025, DOJ filed four major customs fraud cases totaling over $26 million in settlements and claims.

• Most FCA customs cases start with whistleblower complaints — employees earn 15–30% of recoveries.

• The importer of record bears responsibility even when the foreign supplier creates the false invoice.

• Voluntary self-disclosure can reduce penalties. Document destruction escalates them.