Escalating what has already been a strong focus on combating customs and trade fraud in President Donald Trump’s second administration, on July 10, 2025, the Department of Justice announced it would be devoting significant additional resources to the fight. Specifically, the DOJ’s Major Frauds unit—known for its work on procurement fraud and market manipulation—will be shifting resources to trade cases, according to Matthew Galeotti, head of the Justice Department’s Criminal Division. Galeotti added that the unit, which currently has about 35 attorneys but is expected to add “significant personnel,” will focus on cases involving long-running frauds, senior executives and large volumes of alleged losses from unlawful tariff evasion schemes. It will be renamed the Market, Government, Consumer Fraud unit.

“We’re responding to the call of law-abiding businesses that don’t want to—and should not—be put at a competitive disadvantage for paying their lawful share,” Galeotti said. “The criminal code provides tools for prosecutors tailored specifically to this problem.”

Continuing a Trend of Criminal Customs and Trade Fraud Enforcement

The dedication of this new unit to customs and trade fraud issues comes on the heels of a variety of other moves illustrating the Trump administration’s commitment to vigorously fighting these crimes. As Shook attorneys recently advised in Bloomberg Law, on May 12, 2025, the DOJ Criminal Division published a White-Collar Enforcement Plan that named “[t]rade and customs fraud, including tariff evasion” as priority #2 on its list of “high-impact areas” that it will “prioritize investigating and prosecuting.” In addition, in the revised Corporate Whistleblower Awards Pilot Program issued that same day, DOJ added the new subject area of “[t]rade, tariff, and customs fraud by corporations” as a priority area of focus, incentivizing corporate whistleblowers with potential financial compensation for reporting “original, truthful information about criminal misconduct relating to” customs and trade fraud.

The DOJ has a variety of powerful criminal statutes it may use to prosecute these cases.  For example, 18 U.S.C. § 541 makes it unlawful to effect the entry of goods “at less than the true weight or measure thereof, or upon a false classification as to quality or value, or by the payment of less than the amount of duty legally due.” 18 U.S.C. § 542 criminalizes the “entry of goods by means of false statements.” And perhaps most significantly, 18 U.S.C. § 545 makes importing merchandise “contrary to law” a felony punishable by up to 20 years in prison. It applies to anyone who “receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale” of the unlawful merchandise, creating the specter of corporate liability up and down the supply chain. And companies need not have actual knowledge of the customs or trade fraud to be prosecuted; evidence they deliberately avoided learning the truth can suffice. Thus, the DOJ will be well armed to pursue criminal charges against corporations that do not ensure they and their suppliers are complying with trade laws.

Civil Enforcement Also Likely

In a speech given earlier this year, Deputy Assistant Attorney General Michael Granston expressed the DOJ’s intent to “aggressively” enforce the False Claims Act, particularly with regard to tariffs and foreign trade. The False Claims Act imposes liability on anyone who, among other things, “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” It is especially powerful because the government is entitled to treble damages when it establishes liability. In 2024, before President Trump came into office, the government did not identify customs and trade fraud as an area supporting False Claims Act recoveries. Already in 2025, though, the DOJ has announced two False Claims Act actions related to underpaid or evaded customs duties, one involving apparel imported from China and the other concerning multilayered wood flooring from China. The latter case settled for more than $8 million dollars, well illustrating the high stakes that companies may face in these types of cases. In announcing the settlement, Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division emphasized that “[i]mport duties provide an important source of government revenue and level the playing field for U.S. manufacturers against their global competitors,” adding that “[t]he department will pursue those who seek an unfair advantage in U.S. markets, including by evading the duties owed on goods imported into this country from China.”

Looking Ahead

With customs and trade fraud in the government’s crosshairs, companies should take a hard look at their compliance in this area now. Supply chain audits, which companies have long used to root out corruption or inefficiency among their business partners, can also be adapted to ensure that a company’s suppliers are supplying accurate information and paying appropriate tariffs. And effective compliance programs—which are tailored to a company’s significant risks, adequately resourced, and empowered to function effectively—can go a long way towards influencing the government’s view of charging decisions and ultimate penalties. With the assistance of counsel, such compliance programs and audits can be appropriately scoped to a business’s global footprint, industry and risk profile, and kept strictly confidential under the auspices of privilege. Companies cannot simply stick their heads in the sand about this growing enforcement risk, but must heed the ample warnings from the Trump administration and be prepared.