The False Claims Act (FCA) has returned billions of dollars lost to fraud against the government, and customs fraud cases are contributing an increasing portion of that recovery. This month, the US Department of Justice (DOJ) announced the FCA played a significant role in enforcing customs and trade laws over the past 11 months.
Since its launch in August 2025, DOJ’s Trade Fraud Task Force (TFTF) has participated in cases resulting in $1 billion in FCA recoveries. DOJ describes this as a “fundamental shift” in its approach to customs and trade enforcement, emphasizing rigorous criminal prosecution and civil enforcement under the FCA.
DOJ and the Department of Homeland Security (DHS) created the TFTF to investigate and prosecute those who defraud the government through misrepresentations to US Customs and Border Protection (CBP)—including false product descriptions, misstatements about materials, falsified value or quantity, incorrect or concealed country of origin, and schemes to evade customs duties.
“For too long, fraud actors have viewed customs violations as a mere surcharge or cost of doing business,” said Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division. “By utilizing the Department’s full weight, we are making it clear that trade fraud is a serious economic crime.”
The FCA, enacted during the Civil War to combat war profiteering, remains the government’s primary civil tool to recover taxpayer money lost to fraud in government contracting, healthcare programs, importing, and other areas. The FCA’s qui tam provisions allow whistleblowers to file lawsuits on the government’s behalf and, if successful, receive 15% to 30% of the recovered proceeds.
Several of the largest FCA customs recoveries in the past 11 months were initiated by whistleblowers, including:
- A $549.5 million May 2026 settlement with Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC, and four affiliated warehousing companies resolving allegations that they knowingly and improperly evaded, or conspired to evade, antidumping and countervailing duties on aluminum extrusions imported from China; the whistleblowers’ share will be 17.5% of proceeds returned to CBP.
- A $54.4 million December 2025 settlement with Ceratizit USA LLC, a distributor of tungsten carbide products, resolving allegations of knowingly failing to pay duties owed on tungsten carbide products imported from China; the whistleblower will receive approximately $9.75 million.
Phillips & Cohen also contributed to the significant customs recoveries, representing the whistleblower in connection with a May 2026 settlement with Royal Canadian Steel Inc., Farjess Inc., and their president and part-owner. Those defendants agreed to pay $19 million plus interest to resolve claims that the companies avoided paying duties by misrepresenting the country of origin on entry documentation presented to CBP for steel sold to US customers. The companies allegedly claimed that the steel was made in Canada, avoiding customs duties imposed on steel from its actual sources in China, Italy, Indonesia, Turkey, and Vietnam. Phillips & Cohen LLP brought the case in 2023 on behalf of a whistleblower who will receive 19% of the US’s recovery.
Phillips & Cohen is the most successful law firm representing whistleblowers, with recoveries totaling more than $13 billion. If you are aware of potential violations of customs laws and would like to speak with an experienced whistleblower attorney, contact Phillips & Cohen for a confidential review.