On May 12, 2026, the United States Department of Justice (DOJ) announced a nearly $550 million settlement with California company Perfectus (and several affiliated entities) related to False Claims Act (FCA) allegations that the companies ducked antidumping and countervailing duties on aluminum imports from China. In a statement, Acting Attorney General Todd Blanche commented that “the President’s America First Trade Policy defends this country’s national and economic security and ensures compliance with trade laws, including the payment of tariffs intended to level the playing field for U.S. manufacturers.” This message is consistent with the DOJ Criminal Division’s 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,” which Shook attorneys discussed in Bloomberg Law one year ago. The hefty Perfectus settlement and another settlement discussed below are only the latest markers of DOJ’s focus on customs and trade fraud. Importers and international companies should take measures to ensure compliance with applicable duties. 

The Perfectus Settlement

Between July 2011 and June 2014, Perfectus is alleged to have knowingly and improperly evaded duties on more than 2.2 million aluminum extrusions from China by misrepresenting the goods to U.S. Customs and Border Protection (CBP) as finished merchandise not subject to antidumping and countervailing duties. (Antidumping duties are tariffs imposed by a government to protect domestic businesses from foreign competitors selling products below fair market value; countervailing duties are tariffs on imports to neutralize subsidies given to producers in the exporting country.) The company allegedly passed off the aluminum as finished by spot-welding the extrusions to make them look like pallets, but in fact there were no customers for pallets and no pallets were ever sold. In misrepresenting the nature of the goods, the company allegedly deprived the United States of more than $3 billion in duties. The government’s allegations proceeded under the False Claims Act, which among other things penalizes anyone who “knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government.”

This $550 million civil settlement came on the heels of a 2021 criminal conviction for conspiracy, wire fraud and passing false and fraudulent papers through a customhouse. The criminal conviction led to a $1.8 billion restitution award to CBP in 2022. The settlement also stemmed from lawsuits filed by several whistleblowers between 2015 and 2018; the FCA permits private parties to file suit on behalf of the United States for false claims and to share in a portion of the government’s recovery. The civil settlement does not release Perfectus from any criminal liability. The relator’s share of the settlement will be 17.5% of payments received. According to DOJ, the cross-agency Trade Fraud Task Force, which Shook discussed in detail in a previous alert on customs and trade fraud enforcement, coordinated the civil action. 

DOJ Makes Echelon Fitness Sweat

In April, DOJ also settled False Claims Act allegations against Echelon Fitness for $2.1 million. The claims alleged that the smart exercise equipment retailer “deceptively undervalued fitness equipment imported into the United States to lessen tariff obligations and other import assessments” between 2019 and 2023. Specifically, Echelon reportedly failed to accurately value equipment from a China-based manufacturer in invoices it submitted to CBP, “repeatedly” omitting the cost of computer tablets in the exercise equipment. Like the Perfectus matter, this case had a whistleblower component, and the relator will receive at least $420,000 of the proceeds from the settlement.

The Takeaway: Size Is No Immunity From Enforcement

Consistent with Shook’s analysis, DOJ remains focused on customs and trade fraud enforcement. Additionally, these settlements, among others, make clear that DOJ will pursue these actions against massive and relatively minor offenders alike. And in addition to civil penalties, criminal actions with potential sentences up to 20 years of imprisonment are possible for false statements in the customs process. Now is the time for companies to consider proactive measures to protect themselves:

• Supply chain audits. Companies have long used such audits to root out corruption or inefficiency among their business partners. These can also be adapted to ensure that a company’s suppliers are supplying accurate information and paying appropriate tariffs. 
• Effective compliance programs. Thoughtfully designed and adequately empowered compliance programs 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. These programs may also help companies to receive and investigate whistleblower complaints internally, which will allow for remediation and self-reporting to the government. As we recently noted, this self-reporting can go a long way in the Northern District of Illinois and elsewhere to reaching a favorable resolution.

As ever, an ounce of prevention is worth a pound of cure. Regardless of the size of your business or the scale of your international trade, diligent proactive measures can prevent hits to the bottom line, headaches and headlines.