DOJ Cracks Down on Trade and Tariff Fraud: Importers Face Criminal Enforcement
In a major development that should send shockwaves through the importing community, the U.S. Department of Justice (DOJ) has placed trade and customs fraud squarely in its prosecutorial crosshairs. Last month, Matthew Galeotti, the newly appointed head of the DOJ's Criminal Division, issued a memo formally elevating tariff evasion and related violations as top-tier targets for criminal enforcement.
This marks a sharp departure from historical norms, where most trade fraud cases were pursued civilly by U.S. Customs and Border Protection (CBP) or the DOJ's Civil Division. Now, the Criminal Division is fully engaged—and importers must now pay close attention.
Trade Fraud Takes Center Stage
Galeotti's memo named several "high-impact areas" the DOJ will prioritize in its white-collar crime strategy. Trade and customs fraud ranked second, just behind cyber-enabled financial crimes.
Even more significantly, the DOJ updated its Corporate Whistleblower Awards Pilot Program to include "trade, tariff, and customs fraud by corporations" as a qualifying category. This incentivizes insiders to come forward—meaning companies can expect a spike in whistleblower-triggered investigations.
Galeotti emphasized the broader stakes:
"Unchecked fraud in U.S. markets robs hardworking Americans and harms the public. Aggressive, efficient enforcement promotes American economic and national security interests."
This is not just policy posturing—it is a strategic enforcement pivot that will ripple across global supply chains.
"Everybody Does It" Is Not a Defense—And It Never Was
One of the most dangerous misconceptions among importers is the belief that, because certain behaviors are widespread, enforcement risk is minimal. But legality isn't governed by crowd behavior—and regulators don't give free passes to those who follow the herd.
That might have been a manageable gamble in the past. Now, it's a fast track to criminal liability.
When the DOJ elevates an offense category to top-priority status, volume invites attention, not protection. The more common the violation, the easier it is for investigators to detect patterns—and prosecute them.
Real Enforcement, Real Money: The Univar Case
One of the most consequential trade enforcement actions in recent years was United States v. Univar USA Inc., which ended in a $62.5 million civil settlement over allegations that Univar misclassified saccharin imported from China to evade antidumping duties.
Our law firm played a key role in bringing this case to the government's attention. As a result, our clients—who came forward with critical information—shared in the settlement funds under the False Claims Act.
While the case was resolved through civil proceedings, the underlying conduct—intentional misclassification and evasion of trade remedies—would almost certainly attract criminal scrutiny under the DOJ's current enforcement posture.
Historically, criminal referrals in trade fraud matters were rare. But today, with the DOJ's Criminal Division squarely focused on customs violations, importers face a very different landscape: civil penalties are no longer the ceiling—indictments are now on the table.
Why This Matters to EVERY Importer
Trade violations—whether through undervaluation, false country-of-origin declarations, misuse of free trade agreements, or improper tariff classifications—have too often been treated as minor compliance nuisances.
That era is over.
Importers in high-tariff sectors like textiles, steel, electronics, chemicals, and automotive parts are particularly exposed—but no industry is exempt from scrutiny under the DOJ's new enforcement regime.
And if you believe you're insulated because you've outsourced the importing to a third party or supplier, think again. Liability doesn't disappear when you delegate. For a deeper dive into this risk, see:
- Buyer Beware: The Hidden Risks of Unpaid Tariffs Under DDP
- Why Following Your Chinese Supplier's Tariff Advice Could Land YOU in Jail: Part 2, It Will Likely Be Your DDP Deal That Will Put You There
- Tariff Cheaters Beware: A $24 Million Reminder That YOUR Competitors Are Watching
If your company is bringing goods into the United States, this is your wake-up call. The line between regulatory oversight and criminal exposure is now thinner than ever—and crossing it may not be as difficult as you think.
And if you think you are immune because you've offloaded the importing to someone else, you are just wrong. See and e. See also,
If your company is bringing goods into the U.S., this is your wake-up call.
What Importers Should Do Now
1. Build or Strengthen a Robust Import Compliance Program
CBP requires importers to exercise "reasonable care" when it comes to classification, valuation, country of origin marking, and more. That standard, though flexible, now carries criminal exposure.
Best practices:
- Conduct a full audit of past import entries.
- Develop or update written compliance protocols.
- Train in-house staff and customs brokers regularly.
- Retain experienced customs and trade counsel to audit your systems.
2. Conduct Supply Chain Due Diligence
Many violations originate upstream. Blind trust in suppliers' paperwork—or brokers' representations—is no defense.
Due diligence steps:
- Independently verify supplier and manufacturer claims.
- Analyze shipping documents and commercial invoices.
- Perform randomized post-entry audits.
- Maintain detailed records to show "reasonable care."
3. Establish or Revisit Voluntary Prior Disclosure (VPD) Policies
Voluntary Prior Disclosures remain one of the most powerful tools for reducing penalties and avoiding criminal referrals. Companies that identify and disclose violations proactively are far more likely to receive favorable treatment.
A sound VPD policy includes:
- Systems for detecting errors or red flags internally.
- Defined protocols for triage, investigation, and legal review.
- Legal counsel oversight to structure and submit disclosures effectively.
The Enforcement Era Is Here. Are You Ready?
The message from the DOJ is clear: Trade fraud is now a criminal enforcement priority.
If your import compliance hasn't been reviewed recently—or has never been fully formalized—it's time to take action. The consequences of inaction in today's environment could include fines, seizures, business disruption, and even indictment.
If your company imports goods into the U.S., you need to understand your risk exposure—and how to reduce it.
DOJ Cracks Down On Trade And Tariff Fraud: Importers Face Criminal Enforcement
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