DOJ’s New Fraud Division Memo Signals Heightened Trade and Customs Enforcement — and the False Claims Act Is a Central Tool

The recent Department of Justice (DOJ) memorandum outlining the National Fraud Enforcement Division’s priorities signals a strategic shift in how DOJ intends to investigate and prosecute fraud. As discussed in our prior article on the memo’s health care implications, the memo shows that DOJ will concentrate its resources on fraud that threatens the “health, safety, security, and prosperity of Americans,” with emphasis on five priority areas: public trust and financial integrity, health care, internal revenue, global trade and commerce, and corporate misconduct.

This article focuses on what the memo means for companies engaged in global trade and commerce — particularly U.S.-based importers. The takeaway for these companies is that customs and trade fraud enforcement has entered a new and far more aggressive phase, and importers who are not accustomed to this level of government scrutiny need to get up to speed.

Trade and Customs Fraud Is a DOJ Priority

The Fraud Division memo explicitly identifies “Global Trade and Commerce” as one of its five principal enforcement priorities. According to the memo, the Division will “lead the Department’s coordinated criminal enforcement strategy, targeting trade and customs violations and supply chains polluted by forced labor.” The memo further states that prosecutors will focus on “systemic, high-impact noncompliance that threatens our economic and national security,” including “illicit transshipment schemes, country-of-origin fraud, the undervaluation of imported goods designed to evade duties, sanctions evasion, and foreign forced labor schemes.”

DOJ Has Established Tools for Enforcement

• The Fraud Division memo is not the first indicator of the administration’s crackdown on trade violations. Over the past year, DOJ has been developing several other related initiatives:
• The Trade Fraud Task Force. In August 2025, DOJ and the Department of Homeland Security launched a cross-agency Trade Fraud Task Force, combining prosecutors and investigators from multiple agencies — including Customs and Border Protection (CBP), Homeland Security Investigations, Internal Revenue Service (IRS) Criminal Investigation, and more than 30 U.S. Attorney’s Offices. By July 2026, the Task Force had surpassed $1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses in less than one year.
• The Global Trade & Commerce Enforcement Section. In conjunction with the Task Force’s $1 billion milestone, DOJ announced the creation of a permanent Global Trade & Commerce Enforcement Section within the National Fraud Enforcement Division itself — signaling that heightened trade enforcement is a long-term institutional priority.
• A Resource Guide to Trade Fraud Enforcement. In July 2026, DOJ published a comprehensive resource guide detailing the statutes, enforcement mechanisms, and interagency partnerships it intends to leverage — essentially a roadmap for the trade community.
• Technology-Enabled Detection. The memo describes a Division backed by data scientists, automated litigation support, and a new National Fraud Detection Center, which DOJ launched on August 24, 2026, as a multiagency hub for generating criminal leads across all fraud types. On the customs side, CBP is developing an artificial intelligence-enabled (AI) “Detective Border” that integrates shipment data, routing histories, ownership relationships, production-capacity indicators, and other information to identify suspicious transshipment and country-of-origin claims. These are capabilities that did not exist at this scale even a few years ago. DOJ officials have said openly that they plan to borrow from the Health Care Fraud Unit’s data-driven playbook, which used algorithmic detection and AI tools to charge multiple defendants in a 2026 health care fraud takedown.¹ Importers should expect similar techniques applied to tariff classification, valuation, and country-of-origin data.

The False Claims Act Is Driving the DOJ Enforcement Wave

The primary DOJ enforcement vehicle in this new push has been — and will likely continue to be — the False Claims Act (FCA). For decades, the FCA was the government’s tool of choice in health care fraud and defense procurement cases. While health care companies know it well, many importers may not.

The FCA’s “reverse false claims” theory imposes liability for knowingly avoiding an obligation to pay money to the government — which maps directly onto customs duty evasion. The FCA also carries treble damages and allows private individuals known as “relators” to initiate qui tam suits, which means the financial exposure for importers can be enormous. Relators can be anyone — a former employee, a competitor, a customs broker — and they stand to collect a share of whatever the government recovers, often millions of dollars.

Recent cases illustrate the scale:

• Perfectus Aluminum ($549.5 million). In May 2026, DOJ announced the largest customs-related FCA settlement in history. Perfectus Aluminum and affiliated companies agreed to pay $549.5 million to resolve allegations that they evaded antidumping and countervailing duties on aluminum extrusions imported from China by disguising them as finished “pallets” not subject to applicable duties. The case involved over 2.2 million aluminum products and more than $880 million in imports. The relators received approximately $96 million — roughly 17.5% of the settlement — underscoring just how lucrative these cases can be for insiders willing to come forward.
• Ceratizit USA ($54.4 million). In December 2025, Ceratizit USA settled FCA allegations that it routed Chinese-origin tungsten carbide products through Taiwan and falsely declared Taiwan as the country of origin to avoid Section 301 tariffs. At the time, this was itself a record — Perfectus eclipsed it five months later.
• MGI International (criminal + civil resolution). Also in December 2025, DOJ announced a criminal resolution involving MGI International, whose chief operating officer pleaded guilty to conspiracy to smuggle goods into the United States for directing subordinates to misrepresent the country of origin of plastic resin on customs entry summaries.

These cases show that DOJ now views customs evasion the same way it views health care fraud or procurement fraud — as a form of stealing from the federal government that warrants aggressive, multi-tool enforcement.

What This Means for Importers and Trade-Facing Companies

DOJ is building a more centralized, technologically enabled trade fraud enforcement model. For importers and companies with global supply chains, that makes customs compliance an enterprise-level legal risk. And unlike the health care industry, which has had decades to develop compliance programs in response to FCA enforcement, the import community is largely encountering this level of enforcement intensity for the first time.

In light of these developments, companies should consider several practical steps:

1. Elevate customs compliance to an enterprise risk. Customs and trade compliance should not be siloed in the logistics or operations department. It should be integrated into enterprise risk management, internal audit, and legal oversight — the same way health care companies treat billing compliance and anti-kickback programs. Boards and senior leadership should have visibility into import compliance risks.

2. Audit your customs data before the government does. With DOJ leaning into data analytics, importers should do the same. Review import entry data, tariff classifications, country-of-origin declarations, valuation methodologies, and free trade agreement claims for outliers and unexplained anomalies.

3. Scrutinize your supply chain. Companies should understand the actual production flow and country of origin for their imports, retain supporting documentation, and ensure that third-party partners are not creating compliance exposure. Pay attention to customs brokers, freight forwarders, warehouse operators, and foreign suppliers.

4. Take forced labor risk seriously. The memo specifically calls out “supply chains polluted by forced labor.” The Uyghur Forced Labor Prevention Act creates a rebuttable presumption that goods from the Xinjiang region of China are made with forced labor and are barred from entry. In addition, CBP has long enforced trade restrictions on the importation of goods that use forced labor or human trafficking in the supply chain; the DOJ could get involved in these issues as well. The DOJ has signaled that forced labor violations in trade may also carry criminal consequences under 18 U.S.C. § 1589 and related provisions.

5. Integrate tax into trade investigations. The Fraud Division memo makes clear that tax enforcement is a cross-cutting priority. Potential trade fraud matters should be evaluated for tax implications early. If a company uncovers questionable import activity, counsel should evaluate whether there are corresponding tax reporting obligations or exposure.

6. Prepare for overlapping enforcement theories. Importers should assume that a single compliance issue may be framed simultaneously as civil FCA fraud, criminal customs smuggling (18 U.S.C. § 545), false statements (18 U.S.C. § 542), Tariff Act violations, and potentially sanctions or forced labor violations. The Perfectus case is a prime example — it involved parallel criminal convictions, a $1.8 billion restitution order, and a $549.5 million civil FCA settlement arising from the same underlying conduct.

7. Understand the insider dynamic. The FCA’s qui tam provisions allow private individuals — including employees, competitors, customs brokers, and other supply chain participants — to file suit on the government’s behalf and share in any recovery (up to 30%). DOJ has expanded its Corporate Whistleblower Awards Pilot Program to cover trade, tariff, and customs fraud, and CBP reported more than 1,200 investigations into revenue-focused allegations made through its e-Allegations portal. Companies should consider implementing internal reporting mechanisms and response protocols.

8. Consider voluntary self-disclosure. The memo reiterates DOJ’s commitment to hold “accountable organizations that flout the law and reward[] those that voluntarily self-disclose, cooperate, and remediate.” DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy and the Civil Division’s longstanding FCA settlement credit policies provide meaningful incentives for companies that come forward proactively. While numerous factors must be weighed when determining whether self-disclosure is appropriate, the memorandum underscores DOJ’s intent to meaningfully reward companies that take a proactive approach.

Conclusion

DOJ’s memo is a blueprint for a more integrated fraud enforcement regime — larger, more technologically sophisticated, and willing to combine multiple theories in a single case. The enforcement playbook that has shaped health care and defense procurement compliance for decades is now being applied to customs and trade. Companies that import goods into the United States — particularly those dealing with goods from China or other high-tariff jurisdictions — face a fundamentally different risk environment than they did even two years ago.

In this environment, proactive compliance, coordinated risk assessment, and early investigative discipline are more important than ever.

If you have questions about how your company can best follow the compliance requirements discussed in this article, please contact the authors or your Foley attorney.