The Department of Justice (DOJ) has recently begun an aggressive enforcement campaign targeting companies and individuals that attempt to circumvent U.S. tariffs, particularly those imposed under President Trump’s ongoing trade initiatives. The DOJ has ramped up investigations into suspicious import practices and misclassifications, with enforcement actions expected to escalate further in coming months.
DOJ Shifts Fraud Unit to Focus on Tariff Evasion
Threatened as well as actual tariffs are incentivizing companies, both domestic and foreign, to search for creative workarounds, with some risking fraud while closely approaching or even crossing legal lines. Some companies have sought to evade tariffs by misclassifying a product, reporting a questionably low product value or inaccurately reporting the country of origin. [1]
In response to these attempts by companies to reduce their tariff bill, the DOJ has reassigned personnel from its Consumer Protection Branch (Civil Division) to the Market Integrity and Major Frauds Unit (Criminal Division) to help lead enforcement efforts on tariff evasion. [2] This unit, historically tasked with investigating procurement fraud and securities fraud, is now largely focused on importers suspected of underreporting product value, misclassifying goods, or altering country-of-origin declarations to reduce tariff and duty expenses. [3]
Whistleblower Incentive
The DOJ has also expanded its Corporate Whistleblower Awards Pilot Program (Criminal Division) to include customs fraud, encouraging individuals to report companies they suspect of tariff evasion. [4] The DOJ is increasingly relying on whistleblower complaints to initiate investigations, and lawyers report that calls from potential whistleblowers have doubled since Trump’s tariff announcements began at the start of this year. Many whistleblowers are not company insiders but industry rivals seeking fair competition. [5]
Compliance Risk and Enforcement
Companies should note that the DOJ’s enforcement is not limited to clear-cut fraud. As the Acting Assistant Attorney General Matthew Galeotti recently explained, businesses found to have committed “significant violations of law” through deliberate misstatements may face criminal charges, while more negligent errors may still lead to civil enforcement. [6]
Criminal charges resulting from tariff evasion include conspiracy, smuggling and trade fraud, which all carry the potential for prison sentences. Civil charges could involve violations of the False Claims Act, with potentially significant monetary restitution, “up to three times the amount of unpaid tariffs—and penalties—a minimum of $14,308 and maximum of $28,619 per false claim.” [7] For small and mid-sized importers, the financial and reputational damage of a DOJ investigation, regardless of outcome, can be severe. Prosecutors are particularly focused on sectors such as steel, aluminum, consumer goods and textiles[8], where tariff margins are high and classification ambiguities are common.
What Comes Next?
The DOJ’s current enforcement position signals a significant departure from prior administrations, which often handled customs disputes though administrative fines. Now, the DOJ is elevating these matters to criminal fraud and publicizing its intent to pursue charges aggressively.
Companies should monitor the ongoing escalation of the DOJ tariff evasion enforcement and consult their customs brokers or trade counsel to ensure accuracy in how they classify imports, calculate value and determine the import’s country of origin.
Our team will continue to track these DOJ developments. Please contact your regular Lathrop GPM attorney with questions.
[1] The Wall Street Journal (2025, July 14) Battling Tariff Fraud Is a Little-Known Front in Trump’s Trade War.
[2] The National Law Review (2025, July 28) Trump DOJ Elevating Criminal Prosecution of Tariff Evasion.
[3] Bloomberg (2025, July 10) DOJ Frauds Unit Tasked With Pursuing Evasion of Trump Tariffs.
[4] The National Law Review (2025, July 28) Trump DOJ Elevating Criminal Prosecution of Tariff Evasion.
[5] Id.
[6] Bloomberg (2025, July 23) Justice Department Prepares Crackdown on Trump Tariff Violators.
[7] The National Law Review (2025, July 28) Trump DOJ Elevating Criminal Prosecution of Tariff Evasion.
[8] Id.