Insights

On August 29, 2025, the Department of Justice (DOJ) and the Department of Homeland Security (DHS) launched a cross-agency Trade Fraud Task Force to expand efforts to target importers and other parties committing trade-related fraud. As stated in a press release issued on August 29, the Task Force will augment the existing coordination mechanisms within the DOJ and DHS, for instance through partnerships with CBP and Homeland Security Investigations, to “aggressively” take enforcement measures against parties that commit tariff evasion or attempt to smuggle prohibited goods into the U.S.

On June 23, 2025, the Ninth Circuit issued a long-awaited decision in Island Industries Inc. v. Sigma Corp. affirming a $26M False Claims Act (“FCA”) judgment against the defendant importer.  Sigma had appealed the judgment after a jury found the company violated the FCA by failing to pay customs duties owed to U.S. Customs and Border Protection (“CBP”).  The Ninth Circuit’s decision addresses an important jurisdictional issue and illustrates the significant financial exposure importers can face under the FCA at a time of increased tariffs and enforcement by the government.  

On March 27, 2019, the U.S. Department of Justice intervened in United States ex rel Vale v. Selective Marketplace Ltd., a False Claims Act (FCA) suit brought against a clothing importer for allegedly evading customs duties. The suit is the latest example in a growing number of FCA actions brought against importers for allegedly concealing obligations to pay duties to U.S. Customs and Border Protection. The rise in qui tam suits based on avoidance of duties, combined with the administration’s protectionist policies, means that importers could face increased FCA risks for years to come. In an Expert Analysis article published in Law360, C&M attorneys analyze recent enforcement trends and discuss practical steps that importers can take to mitigate risks.

In recent years, there has been a steady rise in the number of lawsuits brought under the False Claims Act (FCA) alleging that importers have concealed obligations to pay duties to U.S. Customs and Border Protection. The increase in the number of qui tam suits filed by whistleblowers, combined with the current administration’s protectionist policies, suggests that U.S. importers could face increased FCA risks for years to come. 

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