DOJ Devotes Additional Resources to Prosecuting Tariff Evasion

The U.S. Department of Justice (DOJ) is devoting additional resources to targeting tariff evasion within the United States, including at ports of entry. While enforcement efforts targeting importers and other U.S. businesses have traditionally been civil in nature, recent activity at the DOJ indicates that the Department intends to pursue criminal prosecution going forward.

Here are just some of the recent developments:

• DOJ Tells Federal Bar Association that It Plans to “Aggressively” Target Customs Fraud – During the Federal Bar Association’s annual qui tam conference in February 2025, the Deputy Assistant Attorney General of the DOJ’s Commercial Litigation Branch told attendees that the Department intends to use the False Claims Act to “aggressively” enforce the Administration’s priorities, including tariff evasion and other forms of customs fraud. 
• DOJ Identifies “Trade, Tariff, and Customs Fraud By Corporations” As an Enforcement Priority – On May 12, 2025, Matthew R. Galeotti, Head of the Criminal Division at the DOJ, issued an internal memo in which he identified “trade, tariff, and customs fraud by corporations” as one of the Division’s top enforcement priorities. The internal memo also states that tariff evasion, “undermine[s] the Administration’s efforts to create jobs and increase investment in the United States.”
• DOJ Incentivizes Whistleblowers to Report Tariff Evasion – In his May 12, 2025 internal memo and in a speech made the same day, Galeotti stated that tariff evasion is now a “priority area of focus” under the DOJ’s Corporate Whistleblower Awards Pilot Program. Similar to other federal whistleblower programs, under the DOJ’s Pilot Program, whistleblowers are eligible to receive a portion of the funds the government recovers if their complaints lead to successful enforcement actions. 
• DOJ Creates New Market, Government, and Consumer Fraud Unit Within Its Criminal Fraud Section – On July 10, 2025, the DOJ announced that it would be consolidating resources from various offices to create a new Market, Government, and Consumer Fraud Unit (MGCF Unit) within its Criminal Division. The new MGCF Unit will use resources previously devoted to prosecuting procurement fraud and market manipulation to target tariff violations for criminal prosecution. 
• DOJ Targets Furniture Importer in South Carolina for Tariff Evasion – On July 15, 2025, the DOJ intervened in a whistleblower lawsuit against a furniture importer in South Carolina. The DOJ alleges that the importer engaged in a “double-invoicing scheme” to evade tariff liability. Notably, the case had been pending since early 2020. 

All of these recent developments point to an enhanced focus on tariff evasion and other forms of customs fraud going forward. Additionally, as illustrated by the pending case in South Carolina, not only is the DOJ targeting violations involving increased tariffs imposed during the second Trump Administration, but it is also reaching back to pursue previously-filed whistleblower complaints as well. In many instances, these cases may be relatively low-hanging fruit—where the DOJ already has evidence of wrongdoing, and where violations that may have previously triggered civil fines may now expose companies and their owners to criminal prosecution under the False Claims Act.

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What Can (and Should) Importers and Others Do to Protect Themselves?

With these developments in mind, what can (and should) importers and other companies—and their owners and executives—do to protect themselves going forward? Here are some key considerations:

1. Conduct an Internal (and Attorney-Client Privileged) Tariff Compliance Assessment

Given the complexity of tariff compliance and the DOJ’s clear indication it is looking both backward and forward to identify violations, companies that are at risk of facing scrutiny should promptly conduct an internal tariff compliance assessment. Engaging legal counsel to assist with and oversee this assessment will ensure that it is protected by the attorney-client privilege.

2. Proactively Address Any Historical Tariff Violations

If this internal tariff compliance assessment uncovers any violations, it will be critical to promptly determine how best to address these historical tariff violations under the circumstances at hand. While one option is to pay the tariffs late (along with any associated penalties), this option can be risky—as it does not afford protection from DOJ prosecution.

Another option is to proactively engage with the DOJ, U.S. Customs and Border Protection (CBP), or other appropriate authorities. By acknowledging past mistakes and seeking to resolve them before they trigger an investigation, importers and others can often protect themselves against criminal prosecution. But, an informed and strategic approach is critical as well, particularly in light of the DOJ’s ongoing efforts to prioritize tariff fraud enforcement.

3. Develop and Implement Effective Tariff Compliance Policies, Procedures, and Protocols

Going forward, importers and others should ensure that they are relying on effective tariff compliance policies, procedures, and protocols to avoid underpayments and other issues that could trigger DOJ scrutiny. Due to the complexity of tariff compliance and the wide range of importing operations that companies can conduct, a custom-tailored approach is essential.

A company’s tariff compliance program should be structured to facilitate compliance on an ongoing basis. Among other things, this means ensuring that tariff payments are based on complete and accurate invoices, that they reflect the nature of the products involved, and that they are based on current applicable tariff rates.

4. Ensure that All Personnel Understand the Importance of (and Their Role In) Tariff Compliance

Along with implementing effective tariff compliance programs, importers and other companies should also ensure that their personnel understand the importance of maintaining strict compliance with the law. If employees do not have a clear understanding of the risks their employers face, they are less likely to give compliance the focus and attention it demands.

Likewise, companies should ensure that all personally understand their specific role in helping to manage tariff compliance on an ongoing basis. Since individual employees’ roles in managing compliance will vary, companies should work with their legal counsel to develop training materials that are specific to each pertinent role within their organization.

5. Internally Monitor and Enforce Tariff Compliance Going Forward

Managing tariff compliance is not a one-time event. To mitigate their risk of facing scrutiny from the DOJ—and to ensure that they are prepared to withstand scrutiny from the DOJ if necessary—importers and others need to internally monitor and enforce compliance on an ongoing basis. Here too, if a violation is identified, an informed and proactive approach to resolving the issue will be essential for avoiding unnecessary consequences.

Of course, companies must monitor for changes in tariff rates and other changes in federal tariff policy as well. Ignorance of the law is not an excuse for non-compliance. If the DOJ opens a tariff evasion investigation, avoiding criminal prosecution will require the ability to clearly demonstrate consistent and timely compliance.

What Are the Penalties for Tariff Evasion?

The DOJ is currently targeting tariff evasion under the False Claims Act. This is consistent with its use of the False Claims Act to target fraud committed against the government in other areas. While many enforcement cases under the False Claims Act are civil in nature (exposing targeted entities to fines, recoupments, and treble damages), the statute allows for criminal enforcement in cases involving willful fraud.

With its May 12, 2025 internal memo and other recent actions, the DOJ has made clear that it intends to criminally prosecute tariff evasion under the False Claims Act. In criminal cases, the False Claims Act imposes fines of $250,000 for individuals and $500,000 for businesses, plus up to five years behind bars. Since False Claims Act penalties apply on a per-violation basis, cases involving allegations of multiple tariff violations have the potential to involve enormous liability exposure.

What Should I Do if I Am Aware of Tariff Evasion?

All of this raises another key question: What should you do if you are aware of tariff evasion?

The short answer is, “It depends.” As we discussed above, if you are aware that your company has not paid tariffs it was required to pay, then working with experienced legal counsel to develop a strategic path forward should be your top priority.

For employees, contractors, competitors, and others, filing a whistleblower complaint under the DOJ’s Pilot Program may be an option. Coming forward may also be an option for those who have concerns about being implicated in a tariff evasion conspiracy. The federal conspiracy statute allows the DOJ to pursue charges against multiple parties, including those that are only tangentially involved in alleged tariff evasion schemes. But, here too, a cautious approach is required, as those who are at risk of facing prosecution must ensure that their voluntary disclosures do not trigger DOJ scrutiny.

Speak with a Federal Defense Attorney at Oberheiden P.C. in Strict Confidence

The federal defense attorneys at Oberheiden P.C. provide experienced legal representation for importers and other entities and individuals targeted for tariff evasion by the DOJ. We provide compliance and whistleblower representation as well. If you need to speak with an attorney, we encourage you to contact us promptly. Call us at 888-680-1745 or tell us how we can reach you online to schedule a free and confidential consultation today.