The federal government has recently increased its focus on trade fraud, highlighting it as an administrative priority and creating a cross-agency Trade Fraud Task Force to combat customs duties and tariffs evasion. In July 2026, the Department of Justice reported that trade-fraud enforcement had produced more than $1 billion in recoveries, penalties, forfeitures, and publicly charged losses in less than one year, including a $549 million False Claims Act settlement resolving whistleblower lawsuits.
Trade Fraud
Trade fraud costs the United States billions and gives tariff evaders an unfair advantage over law-abiding companies. As tariffs play an increasingly prominent role in U.S. trade policy, enforcement has intensified, and whistleblowers with inside information have become critical to exposing fraud.
What Is Trade Fraud?
Trade fraud occurs when companies or individuals use false statements, records, or other deceptive practices to avoid tariffs or customs duties they owe to the United States.
Common Schemes Include:
- Country-of-Origin Fraud: Falsely claiming that goods were manufactured or produced in a country with lower tariffs or duties.
- Transshipment: Routing goods through another country, sometimes with altered labels or documentation, to conceal their true country of origin.
- Undervaluation: Reporting an artificially low purchase price or value for imported goods to reduce the duties owed.
- Misclassification: Deliberately using an incorrect tariff classification or product description to obtain a lower duty rate.
- Antidumping and Countervailing Duty Evasion: Concealing or misrepresenting information to avoid special duties imposed on certain foreign goods.
- False Documentation: Using false invoices, shipping records, certificates of origin, or other customs documents to conceal the true nature, value, or origin of imported goods.
Government Enforcement of Trade Fraud
Whistleblowers and the False Claims Act
Trade fraud can be difficult for the government to detect from customs filings alone. Employees, competitors, suppliers, customers, customs professionals, and others may possess information about a company’s actual supply chain, pricing, product classification, or country of origin that exposes the fraud.
The False Claims Act allows whistleblowers with knowledge of trade fraud to bring a qui tam lawsuit on behalf of the United States. Successful whistleblowers generally may receive between 15% and 30% of the government’s recovery.
For potential whistleblowers, timing can matter: those with credible information should consider coming forward promptly, before the same conduct is reported by someone else or otherwise comes to the government’s attention.
Contact Us
If you think you may have information relating to trade fraud, fill out our contact form or call us at (212) 376-5666 for a free confidential evaluation of your potential case. We represent our whistleblower clients on a contingent fee basis, meaning that an attorney’s fee is paid only if your case is successful.